Financial Times
October 26, 2011
A statement by Mario Draghi, the incoming president of the European Central Bank, apparently signalling his support for the ECB’s programme of buying sovereign bonds in parallel with the eurozone’s rescue fund was portrayed in Brussels on Wednesday night as a critical element in the package of measures being put together to staunch the debt crisis.
Mr Draghi, who takes over from Jean-Claude Trichet at the helm of the ECB next week, was commenting in a speech in Rome on the current purchase by the ECB of the bonds of countries such as Italy and Spain in an operation aimed at holding down the otherwise soaring interest rates being demanded by investors worried about contagion from the Greek debt meltdown.
The programme is officially intended to end after the establishment of the European financial stability facility, which would effectively take over the task of protecting vulnerable countries. Mr Trichet – backed by German chancellor Angela Merkel – had strongly resisted pressure from France and elsewhere for the ECB to commit to further non-conventional measures in preventing contagion, fearing the erosion of the bank’s independence.
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