Greece’s default was a non-event (almost) for investors. But markets won’t be as calm if the country crashes out of the euro, so central bankers are getting ready.
The European Central Bank said Thursday it is now ready for the first time to buy the bonds of a number of companies in the eurozone, in addition to government debt, as part of its trillion-euro stimulus.
“The bazooka is ready,” tweeted RBS economist Alberto Gallo.
The ECB has been pumping about 60 billion euros a month into European markets since March. It’s trying to boost eurozone inflation and growth by making it even cheaper for governments and companies to borrow money.
But the program could also play a crucial role in protecting the rest of the eurozone if Greece has to dump the euro. No country has ever left the eurozone before, and markets would be in uncharted waters.