Term introduced by financial journalists at the end of 2011 with the broad meaning that it would take a one-off, concentrated action with extraordinary penetrating power – like a bazooka – on the part of the EMU members, to end the crisis of confidence in the EUR triggered by the sovereign debt crisis (the arrangement of overwhelming financial resources by the EMU-institutions [central banks and/or governments] to bail out troubled banks and others in order to regain confidence, because lack of confidence becomes a self-fulfilling prophecy as creditors seek to move their money into safer places). – In a narrower sense, this refers to the ECB. The ECB is supposed to buy government bonds of EMU crisis countries on a very large scale in order to relieve them. – See fear, perverse, presumption, central banking, bail-out, bank bail-out, Eurobonds, Eurobonds, European Monetary Union, fundamental error, European Stabilization Mechanism, ECB fall from grace, nuclear option, rescue package, Stability and Growth Pact, Tina, redistribution, central bank-induced, treaty fidelity, confidence bubble. – Cf. Financial Stability Report 2012, pp. 20 et seq. (crisis of confidence in EMU and its causes), Deutsche Bundesbank Monthly Report of January 2014, pp. 41 et seq. (overcoming the crisis of confidence; many overviews; references).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/