Political Animal


September 13, 2012 11:42 AM Eurozone Refuses To Collapse Right Away

By Ed Kilgore

Despite constant predictions of calamity—some made by U.S. conservatives who are willing to trade a stock market plunge for a blow to Obama’s re-election campaign—the Eurozone keeps hanging in there. As you may know, last week the president of the European Central Bank formally announced a plan to aggressively intervene in the bond markets of financially troubled countries to keep borrowing rates from skyrocketing (with conditions involving austerity policies, of course). Earlier this week a German Constitutional Court eliminated a potential legal impediment to that country’s critical involvement in the scheme. And then just yesterday, two pro-Europe “centrist” parties (the center-left Labor Party and the center-right Liberals) won parliamentary elections in the Netherlands, doing much better than expected.

If Ben Bernanke comes through later today with a commitment to undertake a third round pf “quantitative easing” to stimulate the economy, we’ll probably see a real if modest stock market boom, and the best short-term economic prospects in quite a while.

UPDATE: Joshua Tucker has a deeper take on the Dutch elections at The Monkey Cage.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.