Matthew Lynn in an excellent article in 21 July?s Daily Telegraph points out that the ECB has been buying corporate bonds in, amongst others, ?Glencore, a company which only last year came perilous close to imploding, Telecom Italia, with its massive exposure to the weakest major economy in the world and Lufthansa, a lumbering beast of an airline just waiting to be eaten alive by new and aggressive low-cost carriers?. ?In other words the EU?s foremost financial public authority has been handing out State Aid subsidies to a whole load of grateful enterprises. State Aid is defined as ? any advantage granted by public authorities through state resources on a selective basis to any organisations that could potentially distort competition and trade in the European Union (EU).? I would expect smart Alec ECB lawyers would point out that the close definition is national public authorities and not supra-national authorities but that is mere sophistry. It is 100 per cent clear the ECB is breaking the spirit of the Rule with impunity. Read more articles from The City Grump:
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