Tags: Doll | Europe | Implosion | ECB

BlackRock’s Doll: Europe Risks ‘Implosion’ if Germany, ECB Don’t Act

By    |   Wednesday, 23 Nov 2011 08:04 AM

Germany and the European Central Bank must strongly address Europe’s debt crisis to prevent an economic meltdown, says Bob Doll, chief equity strategist for BlackRock.

It’s not an economic issue, but rather a political one, he says. "It's not a matter of economics and how many euros it will take to solve the problem,” Doll tells Yahoo. “It’s 'Is there the political will to do it?' That largely comes from Germany and the ECB.”

At some point Europe’s economic difficulties and sagging financial markets will force action, Doll says. “Otherwise there will be an implosion. We don’t want to see that, and the politicians don’t either.”
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But that doesn’t mean action will be quick, despite the fact that Europe has already probably entered recession, Doll says.

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(Getty Images photo)
“They tend not to operate sometimes on our timetable, but when their backs are to the wall, and we haven’t seen enough backs to the wall yet.”

But the longer European authorities wait, the worse the problems will get, he and others say. Doll says the ECB should cut interest rates further, purchase government bonds and expand its balance sheet – much like the Fed did during the U.S. financial crisis of 2008-09.

It seems fair to lay plenty of blame at the feet of the ECB. It increased interest rates earlier this year, refuses to bail out governments, and is buying only small amounts of sovereign bonds.

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Germany and the European Central Bank must strongly address Europe s debt crisis to prevent an economic meltdown, says Bob Doll, chief equity strategist for BlackRock. It s not an economic issue, but rather a political one, he says. It's not a matter of economics and how...
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2011-04-23
Wednesday, 23 Nov 2011 08:04 AM
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