Draghi May Have to Do `Whatever It Takes': Hewson

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July 4 (Bloomberg) -- Michael Hewson of CMC Markets previews today's ECB press conference and examines the state of the European economy. He speaks on Bloomberg Television's "Countdown."

The european leaders say, crisis is over, we are on the excess -- exit route.

Four days later, it goes up again.

I compare it to a volcano that is dormant for a while and suddenly you get a flurry of activity.

Mr.

draghi did a great job.

About a year ago today he said he would do whatever it takes to preserve the euro.

We are getting to the point where he might have to put his money where his mouth is.

Or will it be an annual declaration?

Will he see it again today?

Is that not enough anymore?

I do not think it is enough.

At some point the market will test the efficacy of the omt for them.

The portuguese market yielding 8%. he needs to address the bond yields.

It also points to austerity fatigue.

I -- there is the question of the imf.

We also have greece as well.

The troika program there is being evaluated.

The imf has a policy where they will not participate unless the debt is proved to be sustainable.

Tortured you stat is, i think, supposed to be around 125% -- portuguese debt is supposed to come in at 125% of gdp by 2015. that is clearly not sustainable.

It comes down to one simple question.

Statement or no statement?

I do not think it matters.

I think mr.

Carney's reputation as a lucky central banker is quite apt.

The way he starts, all the data comes in really good.

We had 0.75% growth.

Looks like a second quarter of 0.5% growth.

His biggest problem is keeping bond yields down.

What is going on in the periphery of the euro zone mr.

Bernanke's comments about tapering, which has pushed yields in the u.s. up to 2.5%. uk yields are 2.39%. can you fight the fed?

Can you fight the tide being created by bernanke's musings about the bond markets?

I think it is very difficult, but i think the fed have got a job to do in that regard as well.

The last thing you want is borrowing costs to go up.

It will be a combined central- bank effort.

If anything, they all have the same problem.

They want to keep rates down.

The ecb's biggest problem now is trying to keep they =-- keep a cap on rates.

We saw spanish manufacturing pmi -- when was the last time that came in about germany's? that is really the problem going forward.

Notwithstanding obviously the unemployment problem in europe.

Thank you very much.

Michael houston, market analyst

This text has been automatically generated. It may not be 100% accurate.

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