BRUSSELS (MNI) – The European Commission sought Friday to calm
expectations of imminent market intervention to lower Spain and Italy’s
borrowing costs, stating that no request for such action had been made.
European Central Bank President Mario Draghi raised hopes Thursday
that common currency’s guardian would soon step up efforts to calm the
Eurozone crisis in saying the central bank was “ready to do whatever it
takes” to preserve the euro. “Believe me, it will be enough,” he added.
The French daily Le Monde on Friday reported that the ECB was
preparing concerted action with Eurozone member states to help Spain and
Italy.
Responding to these developments, a spokesman for the Commission
said only that “there has been no request” from any government for the
European Financial Stability Facility to intervene in bond markets. In
such operations, the ECB would act as an agent for the bailout fund, as
agreed by Eurozone governments, he said.
EU leaders last November authorized the EFSF to purchase government
bonds in secondary markets to help countries under speculative attack.
Such intervention is subject to conditions, including an analysis by the
ECB demonstrating the existence of “exceptional financial circumstances”
that pose “risks to financial stability.”
Countries must also formally request the intervention of the EFSF
and agree to “appropriate policy reform efforts”.
–Brussels newsroom: +324-9522-8374; pkoh@marketnews.com
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