ECB Unveils Steps to Aid Euro Zone

Wall Street Journal
December 8, 2011

The European Central Bank responded Thursday to pressure for radical action to stop the rot in the euro zone's financial markets, but stopped well short of giving any commitment to increased purchases of government bonds.

As European Union leaders gathered in Brussels for a meeting billed as a last-ditch effort to save the region's currency union, the ECB spelled out a raft of measures to help ease pressure on banks, but none to bail out its debt-laden governments, with ECB President Mario Draghi repeating earlier messages that the bank's program of government debt purchases is "neither infinite nor eternal."

Mr. Draghi was also decidedly cool on the prospect of lending money to the International Monetary Fund, in order to let it lend back to troubled euro-zone governments, although he didn't categorically rule out the possibility that national central banks in the EU, rather than the ECB itself, could supply the funds.

"We shouldn't try to circumvent the spirit of the treaty, no matter what the legal trick is," Mr. Draghi said at his second monthly news conference.

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