European Central Bank President Mario Draghi has given his clearest signal yet on what the central bank is upto and how the ECB is going act on the euro crisis, in what seems to be an unofficial disclosure by European lawmakers of his confidential statement before the European Parliament.
According to reports, during the closed-door meeting of the lawmakers, Draghi defended a number of measures introduced by the ECB, including the controversial bond-purchase plan, and indicated that the central bank is not averse to buying government bonds of up to 3-year maturities on the secondary market.
Draghi, who is widely expected to announce the details of his latest crisis-fighting measures after the ECB Governing Council meeting on Thursday, reportedly said that the latest plan will not amount to state financing of euro area governments.
The task before Draghi is to get the backing of Germany for his plan, which remains staunchly opposed to bond-purchases of indebted euro members.
The borrowing costs of Eurozone countries such as Italy and Spain have eased somewhat in the recent weeks amid speculation of a strong ECB action in the near-term. The euro rose after the disclosure of the comments.
Meanwhile, Moody's Investors Service downgraded the credit outlook on the European Union's AAA rating to 'negative' from 'stable', reflecting the negative outlook on EU's triple-A rated budget contributors, including Germany, France, the UK and the Netherlands, which together account for around 45 percent of the EU's budget revenue.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org