FRANKFURT (MNI) – The European Central Bank is ready to conduct
sovereign bond purchases under its new OMT program as soon as the
conditions for doing so are met, ECB Executive Board member Benoit
Coeure said in an interview released over the weekend.
Coeure told Slovenian business newspaper Delo, “as far as the ECB
is concerned, we are ready to undertake Outright Monetary Transactions,
once all the prerequisites are in place.”
“This will require an assistance programme from the EFSF or the ESM
being agreed, while IMF involvement will be sought as well,” he
continued. “It is now up to the governments and the Eurogroup to act. We
at the ECB are ready.”
Coeure affirmed that “OMTs are the best contribution the ECB can
make within its mandate. Their aim is limited, as we want to avoid
destructive scenarios that would not allow the countries to carry out
reforms and that would challenge price stability. But they are not
enough. Economic reforms and necessary adjustments are in the hands of
individual countries and of the Eurogroup, not of the ECB.”
He reminded that OMT is not for countries without access to
markets: “Markets must function, and market discipline serves a purpose.
News coming from bond markets may not be pleasant, but they need to be
listened to. The ECB is not here to replace the markets. This is why the
OMTs will not be undertaken in countries that have lost market access.”
Next year, economic growth will return to the euro area, Coeure
said. Though the expansion will be slow at first, reforms undertaken
will then lead to a gradual acceleration, he said.
Coeure noted that Europe’s financial markets are considerably less
tense than they were before the summer, which he said shows that “market
participants as well as observers from outside the euro area recognise
the significance of what has already been achieved.”
–Frankfurt bureau tel: +49-69-720-142. Email: dbarwick@mni-news.com
[TOPICS: M$X$$$,M$$CR$,MT$$$$,M$$EC$,MGX$$$]
