Bundesbank (German Central Bank) has criticized plans for the European Central Bank (ECB) to intervene in the financial markets in order to reduce borrowing costs for Italy and Spain. Think of increasing the attractiveness of government bonds should, first of all, the government of the states, not the ECB, according to the monthly bulletin released today by the Bundesbank.
"The Central Bank of Germany critically looks at the ECB buying sovereign debt of the euro area, which carries serious risks for the stability in the region" - the document says the Bundesbank.
Recall that in May 2010. ECB initiated a program of buying up troubled eurozone government bonds on the secondary market (Securities Markets Programme, SMP). The first phase of the program ECB acquired securities of Greece, Ireland and Portugal. In August of 2011. bank started intervention in the market of government bonds in Italy and Spain, having spent a more than 211 billion euros. However, in February 2012. ECB suspended intervention, explaining the passivity of European governments in establishing European anti-crisis mechanisms.
2 August 2011. reported that the ECB is working on a new mechanism for crisis intervention in the bond markets in the eurozone. "The Governing Council of the ECB may make direct operations in the open market in an amount corresponding to its goals," - said the head of the ECB, Mario Draghi, indicating that the circuit is further "non-standard" of monetary policy will be identified in the coming weeks.
Earlier, German media reported, citing unnamed sources, that the ECB intends to take new steps to stabilize the yield on government securities in the euro area, in coordination with the European stabilization mechanism (ESM). According to unofficial data, ESM can be directly funded by the Government of Spain and Italy by buying bonds of these countries on primary placements, while the European Central Bank intervention to support these activities in the secondary market. It is assumed that the final decision on a new crisis mechanism will be taken no earlier than September 2012.
On the eve of one of the most influential business books of Germany reported that the ECB is preparing a new extended and modified the program of buying up assets in which will set the maximum allowable level for an increase in interest rates on debt securities of troubled eurozone countries, at which the ECB will automatically start buying government bonds. The introduction of such a "threshold" level will allow the ECB to control the cost of borrowing for the euro area and to prevent excessive fluctuations in exchange rates of the block.
17 August 2012. Chancellor Angela Merkel said that Germany was in favor of retaining the euro and supported the actions of M. Draghi, noting that they "totally agree" with the current approaches of European heads of state.