Spain and Italy are victims of profit seeking market – OECD

Angel Gurria, secretary general of the Organization for Economic Co-operation and Development, said Thursday that Spain and Italy are “doing all they need to do” to improve their economies and appear to be a victim of profit-seeking markets.

“We have a good system of punishing a bad economy immediately; access to markets becomes more difficult, etc. But we don’t have a system of reward,” he said.

“Spain and Italy are doing all they need to do and the market is still hitting them. So maybe someone is betting against the euro and using Spain and Italy as vehicles,” he said.

Mr. Gurria was speaking to reporters after the release of the OECD’s latest economic report on Indonesia.

He also suggested the European Central Bank needs to do more to stabilize the debt-laden economies against risk of default.

“If I have a bazooka, in the first stage, then the second stage is that I’ll open the closet and take the bazooka out. In the third stage you’re willing to use to bazooka, which is where we are today, I think,” he said. “Maybe we need to fire a salvo shot, just so everybody takes notice that the bazooka works and that you’re also willing to use it.”

The ECB, as well as governments across the euro currency bloc, have taken a number of steps to try to resolve the fiscal crisis that has pushed several of its members into taking financial aid.

Via – MarketWatch

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