ECB Held Hostage By Europe's Sovereign Debt Crisis

European Central Bank (ECB) President Jean-Claude Trichet earlier this year resisted pressure to intervene when Greece's budget deficit spurred investor concerns about the viability of the Eurozone and its single currency, the euro. But a bond market sell-off forced Trichet's hand and the ECB began purchasing government debt. Now budget deficits in Ireland, Italy, Portugal, and Spain - the remainder of the so-called "PIIGS" - have again forced Trichet and the ECB out of their comfort zone. After signaling last month that the ECB could start limiting access to its funds, the central bank yesterday (Thursday) said it would delay its withdrawal of emergency liquidity measures. "Uncertainty is elevated," Trichet told reporters after meeting with the ECB's Governing Council. "We have tensions and we have to take them into account."