FRANKFURT (MNI) – The European Central Bank is considering the
possibility of capping the sovereign bond yields of peripheral Eurozone
states, German weekly Der Spiegel reported Sunday, citing no sources.
According to the plan, the ECB would intervene in sovereign bond
markets when spreads above German bunds reached a pre-determined
threshold. The ECB Governing Council will decide on whether to implement
the strategy at its next meeting in September.
Spiegel said the threshold would serve as a signal to investors of
what level the ECB considers appropriate. The article also suggested the
ECB would be prepared to use unlimited resources to keep the yields of
peripheral government bonds below the target level.
Separately, Spiegel also reported that Greece needs to find an
additional E2.5 billion in cuts over the next two years to meet
international demands, according to the findings of the Troika, which
includes the ECB, European Commission and International Monetary Fund.
The Troika report also found that about one third of the E11.5
billion in budget cuts already planned by the end of 2014 is not covered
in the details of Prime Minister Antonis Samaras’ plan, Spiegel said.
— Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com
[TOPICS: M$X$$$,M$$EC$,MGX$$$,M$G$$$,M$$CR$]
