BRUSSELS (MNI) – The European Central Bank didn’t discuss the
possibility of buying government bonds at its monetary policy meeting
today, European Central Bank President Jean-Claude Trichet said.

“We did not discuss this option,” Trichet told reporters at a press
conference in Lisbon after the meeting. He later declined to comment on
reports that one of his Council colleagues, Bundesbank President Axel
Weber had expressed opposition to the idea of buying government bonds.

“I won’t comment on what my Council colleagues might say,” Trichet
said. “We did not discuss the matter, and [I've got] nothing else to say
on that.”

Markets have speculated that the ECB could begin to buy government
bonds as a way to alleviate bond market pressures, particularly on
high-debt countries like Greece, Spain and Portugal, in the light of
recent sharp spread widening of those countries’ securities.

Greece has been offered a E110 billion lifeline from the Eurozone
countries and the International Monetary Fund to take it out of the
market for up to 18 months. To support this decision, the ECB said it
would suspend the minimum credit rating threshold for Greek debt
instruments used as collateral at the central bank.

Trichet also said the Governing Council didn’t discuss a default
procedure for the Eurozone. “Greece will not default,” he said. “Default
is out of the question; it’s as simple as that.”

–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com

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