The ECB s Honeymoon is Over

A honeymoon in Canada costs a lot of money.

And Jill and Kevin, the happy couple, they came back from their honeymoon and found that their video had gone crazy viral.

The honeymoon for the European Central Bank is over. Because European interest rates no longer are clearly out of whack with the fundamentals of the euro zone economy, monetary policy has become more complex.

In India, the question is whether newly elected Prime Minister Narendra Modi will move decisively to fulfill voters high expectations for economic reform before his post victory honeymoon is over. And China will have to mitigate financial risks if it hopes to avoid a hard landing.

Most of the next two decades were a honeymoon for Sino American relations. On the economic front, the US not only granted China most favored nation trade status, but also tolerated China s mercantilist approach to international trade and finance, notably its dual track exchange rate regime.

Xi may still be enjoying a honeymoon with the Chinese public, but it is likely to be a short one. His predecessors had ten years to carry out real reforms and accomplished little, leaving the Chinese in no mood to endure another decade of government by shibboleth.

Macri s honeymoon is likely to be brief the Peronist opposition, having rid itself of the Kirchners, will not hesitate to attack the new administration. But if he uses his political capital wisely, he has a good chance of stabilizing the economy while retaining reasonable levels of political support.

In other words, Greece's new government must now try to convince its European partners that it deserves more financial support, while pushing for a reduction of its existing debt and resisting the austerity policies on which previous lending was conditioned. For Syriza and its voters, the political honeymoon could be short.

Calm economic waters had given the ECB and Trichet a honeymoon until last fall. But, with financial markets now in turmoil and likely to stay that way, the time has come for the ECB to jettison its use of code words a poor substitute for real central bank transparency in any case.