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ECB bond-buying plan rouses international support

'A positive development' says White House

07 September, 20:11
ECB bond-buying plan rouses international support (ANSA) - Rome, September 7 - Leaders in Europe and abroad expressed relief at the European Central Bank's plan to buy up bonds from debt-burdened eurozone countries on Friday while some cautioned governments to continue to take decisive action. German Finance Minister Wolfgang Schaeuble told his Swedish counterpart Anders Borg in Stockholm that Italy and Spain, which have been at the heart of the sovereign-debt crisis, have made impressive progress in slashing spending and improving competitiveness to help fix their economies.

The two countries' efforts have been "very impressive (and) the numbers are very convincing," he said.

Schaeuble also said the European Central Bank's unlimited bond-buying plan, announced Thursday, did not amount to the start of monetary funding for state debt.

In the face of German media claims the new ECB policy overstepped its brief in underwriting troubled economies' debt with "blank cheques", the German government stressed Friday the ECB was acting within its remit.

In the same vein, German Foreign Minister Guido Westerwelle said his government supports solidarity in the eurozone.

"There is a very clear message from the German government: we want to maintain unity in the eurozone," Westerwelle told ANSA at an informal ministers' summit in Pafos, Cyprus. Westerwelle was referring to the fallout following Germany's dissenting view on the European Central Bank's plan announced Thursday to launch a bond-buying measure to lower borrowing costs for troubled states.

In the face of ECB President Mario Draghi's determination to protect the euro, Germany's Bundesbank has harshly criticized his bond-purchase plan.

But Westerwelle on Friday was positive about the direction in which the eurozone was headed, as renewed market confidence continued to push the spreads and yields on Italy's and Spain's debt lower and lower following the announcement of the bond-buyout plan.

"For the first time in many months I've seen a bit of light at the end of the tunnel," he told ANSA. "The clear efforts of Rome and Madrid have been remarkable".

German Chancellor Angela Merkel deflected questions about the European Central Bank's (ECB) bond buying program, saying that the institution is "strong and independent".

Spanish Foreign Minister Jose' Manuel Garcia-Margallo said that the bond-buying plan to help reduce borrowing costs in the region's most troubled nations "must be rapidly enacted".

He called ECB President Mario Draghi's unveiling of the plan a "fitting parable," "The fact that a couple of statements can calm down the markets proves it was the right thing to do," he added. "It called for courage and political determination".

In Washington, the White House said that the bond-buyout plan represents a "positive development" towards resolving the euro crisis.

Speaking on American business channel CNBC, Alan Krueger, chairman of the White House Council of Economic Advisers, added that the crisis continues to burden the US economy.

In Italy, Premier Mario Monti said that further measures must be taken on a national level, adding he would stoke economic growth in a number of ways but stressed that raising public spending was not one of them.

The Italian business sector by and large hailed the ECB plan.

"It is a choice of common sense, a small step forward towards normalization," President Alberto Bombassei from brake systems giant Brembo said on Friday.

The bank's move is "in line with what was expected" by eurozone leaders, Bombassei said.

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