Germany’s constitutional court dismisses challenge to EuroZone bailout fund

The German constitutional court’s decision to dismiss challenges to Germany’s participation in the EuroZone’s permanent bailout fund, the European Stability Mechanism, clear the way for that facility to go into operation in early October. Which would bring the EuroZone a step closer to implementing Mario Draghi’s plan to support Italian and Spanish bonds

Markets can’t decide what today’s news from Greece means

This morning markets were down on news that the troika of the International Monetary Fund, the European Commission, and the European Central Bank had rejected 3 billion euros of proposed cuts to Greek spending on the grounds that they were too vague. And then markets rallied on publication of an article saying that German chancellor Angela Merkel had changed her mind on Greece and now wants to do everything she can to avoid a Greek exit from the euro.

Draghi’s plan is really just a promise of action–but that’s enough to make the markets soar today

President Mario Draghi has promised that the European Central Bank will act as a backstop to prevent interest rates in Italy or Spain—and presumably other EuroZone economies—from spiraling into crisis. But there are conditions attached that make the plan an outline for future action rather than a recipe for immediate moves.