BLOOMBERG, BUSINESS INSIDER (USA), LA TRIBUNE (France), BBC NEWS (UK)
FRANKFURT - The European Central Bank (ECB) is holding a meeting today in Frankfurt (Germany) to make a crucial decision on the euro's future reports French financial newspaper La Tribune.
Investors are looking for the European Central Bank President to make good on his promise to do whatever is needed to protect the euro, interpreted by most as a signal that the ECB will intervene in bond markets, reports Bloomberg.
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While the leaders of Germany, France and Italy have appeared to endorse Draghi's plan, echoing his language in saying they will do whatever is necessary to protect the euro, significant hurdles remain, adds Bloomberg.
There is also speculation that the Eurozone's current bailout fund - with the ECB as its agent - will buy government bonds at auction to drive down the Spanish government's actual cost of borrowing, reports BBC News. But there is controversy around any such plan as the ECB is forbidden from lending money to European governments under its constitution.
"If Draghi just comes out with a do-nothing, markets are going to react extremely badly and the ECB will have a full-blown crisis on their hands," James Nixon, chief European economist at Societe Generale SA in London, told Bloomberg.
Last month, the ECB's President Mario Draghi had some strong words about how high peripheral borrowing costs were impeding monetary policy, reports Business Insider.
According to a survey carried out by Bloomberg, economists expect ECB officials to keep the benchmark interest rate at a record low 0.75%. The deposit rate will be left at zero, another survey shows.
Meanwhile, markets in Europe are currently slipping, reports Business Insider. Italy is down 0.6%. Spain is down a little less.
The ECB will make its decision public at 1:45 pm local time in Frankfurt while Mario Draghi will hold a press conference at 2:30 pm.
If the Eurozone leadership +ECB suddenly solve Eurocrisis I will demand they are tested for performance enhancing drugs. So uncharacteristic
— Paul Mason (@paulmasonnews) July 31, 2012
