The ECB offered little new support to the region’s troubled bond markets at its monthly press conference.  There was a faint hope ahead of the meeting that the council would take bold steps to address the crisis, for example via discussing bond purchases or adding liquidity to shore up confidence. However, Jean-Claude Trichet’s opening statement was notable for its lack of acknowledgement that the crisis had reached a more serious plane, preferring to simply endorse  the latest Greek stability plan.

The reactionary approach that has been taken to deal with the crisis so far has been viewed negatively by the markets, with authorities being forced onto the backfoot to defend the system. The ECB today missed an opportunity to take a more offensive stance to shore up confidence, preferring the status quo of reacting to events when forced to do so. The lack of leadership within Europe in recent months has undermined investor confidence, and even the bold size of the Greek bailout package has done little to allay fears that the Euro project is like a runaway train with no driver.  The risk remains that if market stresses intensify further, any reaction would be too late to bring the Euro locomotive back on track.

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