About the ECB rates cut

On 3rd November 2011 the board of directors cuts the interest rate for the main refinancing operations, from 1,50% to 1,25%.  

This is the first monetary policy decision taken since the change of the president.

Clearly the ECB cuts the rate to help the distressed country, as Italy, to issue its debt at a lower rate, but the market did not react as expected and the price of the italian debt continues to drop day by day (then the rates  rise).

The economy does not need a 250bp rate cut to recover. A 1,25% rate level is just a very low level and an economy that needs a lower level is an economy without hopes to recovery. The Japanese lesson continues to be an unlearned. The same for the american one where the FED holds the FED funds rate to 0%-0,25% since 16 Dec.2008 without improvement for the REAL economy and the jobless rate.

The cut is useless in the short term and it could be dangerous in the long term due to the inflation rate (October 2011 = 3,0%).
The ECB justified the cut because estimates a lower CPI in the next months. Don't forget that the ECB and the FED missed all the estimate since 2007.
These central banks are no longer accountable because they are at the service of the big financial firms.

The European CPI is well above the 2% warning level, then the ECB is acting against the treaty provisions.