BERLIN (MNI) – European Central Bank President Mario Draghi is to
present today a two-pronged strategy to contain the Eurozone debt
crisis, the German daily Sueddeutsche Zeitung (SZ) reported Thursday.
According to SZ, Draghi is planning a concerted action by the ECB
and Europe’s future permanent bailout fund, the European Stability
Mechanism, to bring down high bond yields of Italy and Spain.
Under this plan, the ESM would buy Spanish and Italian bonds on
the primary market while the ECB would purchase larger amounts of bonds
on the secondary market, the paper wrote.
German weekly Der Spiegel had already reported a similar plan last
Sunday.
SZ wrote today that a majority is emerging in the ECB Governing
Council in favour of resuming the central bank’s bond purchasing program
and coordinating it with Eurozone governments. A final decision,
however, could only be taken after the German Constitutional Court has
delivered its preliminary ruling on the ESM on Sept. 12, SZ said.
The role of the ECB would be to push the interest rates down to an
acceptable level before bond auctions and to keep them fixed at a lower
level over the long-term, SZ said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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