Spanish 10-year bond yields have officially pulled a Kenny Loggins and ridden into the 7% danger zone. Italian bond yields are north of 6% again and climbing. And oh yeah, Greek elections on Sunday may lead to the end of a Hellenic presence in the euro and a return to the drachma. The crisis is far from over.
So what's the European Central Bank doing to try and stop it from getting even worse? Not much. The ECB left interest rates alone last week even though they technically do have room to cut them further. Rates in Europe are at 1% compared to the near-zero level in the U.S. and 0.5% in England.
ECB president Mario Draghi hinted last week that there could be a rate cut at the bank's next meeting in July. But he also noted that central bankers can't do much more to stabilize the region and that it's the job of the leaders of individual European nations to take more action.
"Unlike Bernanke, Draghi seems reluctant to purchase more sovereign debt. That is the ECB's biggest problem," said Jeffrey Bergstrand, a professor of finance with the Mendoza College of Business at the University of Notre Dame. "The ECB can change the rules but they have been unwilling to do that. The ECB is more or less waiting things out."