The Bild called the European Central Bank's rescue plan a “Blank Cheque for Debtor States” and the front page of Die Welt said “Financial Markets Rejoice at the Death of the Bundesbank”.
The Süddeutsche Zeitung remarked that "Rescuing the euro at any price could be an economic disaster--that is the red line that must not be crossed. The other limit is the law: In a community based on law, the ends can never justify the means. A euro community that is based on constantly breaching treaties is built on a shaky foundation. On Thursday, the ECB unfortunately crossed both red lines....The crisis countries are not out of the woods yet. And that means that if the ECB provides them with unlimited help, then it is financing unsound states. It can only do so by printing ever more money. Ultimately, there will be the threat of bubbles, crises and inflation. It will benefit speculators, and the vast majority of citizens will have to foot the bill."
And from the Frankfurter Allgemeine Zeitung: "Draghi has made it clear that, from now on, the ECB will only buy bonds when a crisis-hit country asks for help from the euro rescue fund or agrees to other conditions. But that promise isn't new. The would-be saviors of the euro have been insisting on structural reforms for years. The recipients of aid make promises but often do not keep them. But what will the ECB do if, say, Italy does not carry out the labor market reforms it has promised? Is it going to start selling Italian bonds? It can't if it takes its own argument seriously, that monetary policy in the euro zone no longer functions properly.
"The leaders of southern euro-zone countries should be happy: they can continue to borrow at low interest rates and do not need to worry about finding investors. But the northern leaders are satisfied, too, because they can hide behind the ECB and do not need to face uncomfortable questions in, say, the Bundestag about all the additional risks that Germany is taking on. In the euro zone, there is no longer a distinction between monetary and fiscal policy."
This dichotomy between German dread and giddiness in the markets is dangerous. But perhaps more importantly, the yield-dampening effect of the ECB's programme may give peripheral-country governments more time to delay the reforms that are so badly needed.
If structural adjustments are not successfully implemented, the crisis could grow to afflict the entire euro area in the future. And by then, Germany's patience may have run out.
In other words, instead of giving peripheral countries the Beastie Boys' license to ill, the ECB may be providing them with James Bond's license to kill.
Thus, today's euphoria in the markets is quite likely to give way to a more sober assessment of the long-term risks in the coming days and weeks. One suspects that the euro will quickly reassume its role as a funding vehicle for the carry trade--and that market-entry opportunities will be created on both sides of the currency in the process.
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