Mario Draghi-the ECB president who gave his words to the market that he will do anything to save the Euro, now seems to be contrary to the famous quote “Action speaks louder than words”. With his commitment, the market breathed some air of hope which saw the Euro getting stronger against dollar and European stocks becoming a lucrative bet for the traders. But now when the time had come for some action by the ECB, the whole scenario resembled some worst movie that brings in heavy attention by its deceptive trailer. The central banks around the euro zone came out with no steps that would bring any stimulus that the market was anticipating. No matter how much Draghi verbally bragged about saving the Euro against all odds, little did he know that central banks solely could do no good to the economy without any specific actions from the government as well.

Unlike the fact that saw 2008-2009 recession mitigated by the Central bank’s sole endeavor this time around; the central banks could not be the savior all alone but only with the government bringing out new policies and tools that addressed the economy could pull some signs of recovery. The political interference at present has to become a rigid one this time that could address the financial turmoil lingering around the euro zone. It’s time for the political leaders to address issues regarding competitiveness, fiscal reforms and the problem of little growth in the economy. And alongside provide the measures by either retooling or retaining the existing policies. The central banks seem to have lost their power or either lost their hopes to bring the Euro Zone out of the abyss.

Without any stimulus in the ailing economy, it was much of a disappointment to the traders. The euro hit a record low to all the other stronger currencies like the USD and the JPY. Investors are now moving away from holding Euro and European stocks and begun holding bonds as safe haven instead. The gold prices are also likely to go south if the bleak hope of any further stimulus further diminishes.

Note: The blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.