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European Central Bank takes action


European Central Bank takes action


The European Central Bank has stepped in to stem an accelerating sell-off of euro zone government bonds claim traders with one quoted as saying, “ they are heavily in on Italy and Spain.”

The ECB policy makers though, continue to reject growing international pressure to intervene as Europe’s lender of last resort, stressing its up to governments to resolve the debt crisis through austerity measures and reforms.

The ECB has followed a policy of what’s been described as, “stop-go” purchases as a temporary measure to stabilise markets. In the last four months their spending peaked in September.

In the first week of November it halved its purchases well below analysts expectations. Now there is pressure from beyond Europe to take action.

“Until we put in place a concrete plan and structure that sends a clear signal to the markets that Europe is standing behind the euro and will do what it takes, we’re gonna continue to see the kinds of turmoil that we saw in the markets today,” said US President Barack Obama.

It is not the first time Obama has focussed on the euro while battling economic problems at home. It is still unclear if or how the ECB will react and if Wednesday’s shopping trip will be followed by more bond buying.

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