FRANKFURT (MNI) – The European Central Bank should consider
sovereign bond buys in peripheral Eurozone countries even without the
conditionality of an ESM rescue program, OECD Secretary-General Angel
Gurria said in an interview published Tuesday with Germany’s Frankfurter
Allgemeine Zeitung.
“The ECB should operate on the basis of objective criteria on the
ground,” Gurria told the paper, arguing the central bank should have the
flexibility to act if it sees that yields are rising and the conditions
for interventions are right.
If the central bank waits for an ESM rescue program to be approved,
“this could lead to the ECB not being able to act fast enough to lower
spreads,” Gurria said. The ECB has made applying for ESM aid a necessary
condition for considering an intervention in a country’s bond market.
Gurria also warned that seeking aid from the European Stability
Mechanism could in itself lead to a country being cut off from financial
markets, a reason he said Spain was holding off requesting a program. He
suggested the ECB could instead engage in “small interventions at the
margins” to help countries undertake fiscal reforms.
Gurria said Italy and Spain were undertaking “brave and important
reform projects every day.” Even if some of these were still in their
infancy, “if we wait until the last minute to see if every last measure
is enacted, it will be too late.”
— Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com —
[TOPICS: M$X$$$,M$$EC$,MGX$$$,M$G$$$,M$$CR$]
