ECB trots into the ring

"The ECB defends Spain and Italy with a record purchase of debt," headlines the daily El País, reporting the purchase by the European Central Bank of €22 billion worth of bonds from the two countries "to calm the markets." It’s a "record" figure, following the launch in May 2010 of the ECB’s so-called Securities Market Programme (SMP). "A drop in the ocean," writes the Madrid daily – but its effect on the markets was "immediate."

This initiative by the ECB is "temporary", adds El País, pending the acceptance by national parliaments within the eurozone of the strengthening of the European Financial Stability Fund (EFSF), at the start of September at the earliest. For the Frankfurter Allgemeine Zeitung in Germany, buying back debt of countries in trouble is a bad strategy that plainly marks the “demise of the ECB". Dominated by countries in the south, which hold the majority on its board of directors, the European Central Bank "has turned into the European Bad Bank," whose reputation can only get worse.