He admits rate cuts do very little in this situation. Admits that intervention has limited and short term impact.
Will he be allowed to speak again? So truthful yet contradictory to what everyone wants to believe.
I doubt it is a co-incidence that he is Dutch. Another story floating around about transitioning from EFSF to ESM also listed the Dutch as a potential roadblock. They are 3rd largest AAA participant in all these schemes – maybe they are sick of their role? Merkozy seems to be happy to decide the fate of the Dutch guarantees but maybe the Dutch are less happy about it. Finland was small enough that their legitimate concerns could be addressed in side deals – that might not wok for the Dutch.
European Stocks Drop as ECB’s Knot Says Can’t Do ‘Much More’
2011-11-10 10:56:38.509 GMT
By Peter Levring
Nov. 10 (Bloomberg) — European stocks declined after
European Central Bank Governing Council member Klaas Knot said
the bank can’t do “much more” to stem the debt crisis. U.S.
index futures rose and Asian shares fell.
The benchmark Stoxx Europe 600 Index dropped 0.3 percent to
235.62 at 10:50 a.m. in London. The gauge has rallied 9.7
percent from this year’s low on Sept. 22 as German Chancellor
Angela Merkel and French President Nicholas Sarkozy pushed for
expanding the European Financial Stability Facility, the bailout
fund. Standard & Poor’s 500 Index futures added 0.7 percent,
while MSCI Asia Pacific Index fell 3.3 percent.
Stocks fluctuated between gains and losses in the morning
as the ECB was said to be buying Italian bonds, a day after the
debt of Europe’s second-most indebted country surged to euro-era
“Not much more can be expected from us, it’s up to the
governments,” Knot, who also heads the Dutch central bank, told
lawmakers in The Hague today. “Interventions can only have a
temporary and very limited effect.”
Knot also said “the effect of interest-rate cuts in the
current situation is limited.”
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–Editors: Srinivasan Sivabalan, Will Hadfield
To contact the reporter on this story:
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To contact the editor responsible for this story:
Andrew Rummer in London at +44-20-7073-3722 or