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Krishna Memani, SVP and director of fixed income at Oppenheimer Funds, on policy shifts taking place in Europe amid the ongoing debt crisis.
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Formally ask for -- helped.
Well for more how or this will play out I'm joined now by.
Wish them a money director of fixed income and Oppenheimer Funds and -- thank you for being here on the I was in Frankfurt last week for the ECB.
Announcement on Thursday which was greeted with a dole followed.
Although there -- presently Central Bank did hint at stuff to come down the line more measures com.
How soon do you think it is the full Spain puts his hand up and says you know what we need help.
I think it will be relatively quick.
-- relatively quickly so the point that would make is.
It it it is while it is not easy for them to -- they really have no choice.
Without any help from the ECB ES ME FSF the likelihood that they'll be able to finance had any reasonable range is pretty small so.
They have to do that and that -- Help comes with some pretty strict guidelines as well -- is difficult for the country to obviously is that whole problem of how do you.
Get around austerity and grow your economy it's that there against each other on things short -- I think of the -- issue about austerity and issue about lack of economic growth.
Is not going to go away any -- soon and what will go away is that inability to finance that debt in the public markets so Spain puts his hand and says we need help I would imagine van or lies on Italy and Italy situation is little different they are they they have huge public debt that economy just can't seem to get going -- goal.
But the not in the same situation to Spain is that right yes of their financial situation is very very different they don't.
They don't to have need for deficit financing which is the case.
In Spain in addition Spanish banking system is in shambles so -- that those strikes against Spain that you don't have against Italy.
But you could see that borrowing costs go up is actually jumps in his gets the help absorb so I think in ifs.
And those and then if he doesn't then people will gang up on move -- and can easily withstand that.
-- well I don't think without any help from the from the ECB day -- -- -- we have heard of that but this BAC ECB goes out and says.
Have been going to stand how the help Spain and if need be held -- Maybe they they can wandered off.
For a little while longer so much of this equation though is about Germany and the Bundesbank looking over the shoulder of the EC being top topping cents.
You can't be buying bonds this is not what you'll mandates is.
Angela Merkel German -- kind of supported the -- buying program Tom how much sway does the Bundesbank cold here.
I think when this -- is the only institution that is standing in the way of very large scale asset purchases by the ECB.
And in their mind they're doing the right thing because they think they have some political leverage to get the economies of these countries restructured so I think they in their mind that doing the right thing and they'll probably use this leverage still.
-- -- -- I -- do you think eventually though the Bundesbank will be ignored.
-- what -- -- -- be kind of they will -- -- -- agreed but reluctantly which is advertising their style with respect to any initiative that -- comes out of the ECB and quickly -- -- Greece I mean it's almost like they've been forgotten now there's almost like -- -- do you agree.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- I think over time that's probably inevitable as well right fascinating stuff it's the gift that keeps on giving Christian -- The money thank you so much for being here appreciate it thank.
