European Debt Crisis ECB's Draghi Says No Quantitative Limit on Bond Buys
"European Debt Crisis" ECB's Draghi Says No Quantitative Limit on Bond Buys (VIDEO). Mario Draghi says he will do "whatever it takes" to save the euro. The ECB wants to help cut the borrowing costs of debt-burdened eurozone members by buying their bonds.
Ahead of the announcement, the ECB kept its benchmark interest rate unchanged at 0.75%.Mr Draghi said the ECB would engage in outright monetary transactions, or OMTs, to address "severe distortions" in government bond markets based on "unfounded fears".
He insisted that the ECB was "strictly within our mandate" of maintaining financial
stability, but reiterated the need for governments to continue with their deficit reduction plans and labour market reforms.He added that the ECB's actions come in response to eurozone economic contraction in 2012, with continued weakness likely to continue into 2013.
The ECB expects the eurozone economy to shrink by 0.4% in 2012 and grow by 0.5% in 2013, with inflation rising to 2.6%. OMTs will only be carried out in conjunction with European Financial Stability Facility or European Stability Mechanism programmes, he said.
The maturities of the bonds being purchased would be between one and three years and there would be no limits on the size of bond purchases, he added.The ECB will ask the International Monetary Fund to help it monitor country compliance with its conditions.
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