The European Central Bank is trying to ease fears about its plans to “save the euro” by buying the government bonds of those eurozone countries that come under pressure from unsustainably high borrowing costs.
Top ECB policymaker Joerg Asmussen said they will only act in parallel with EU bailout funds and in return for reforms. He stressed they would not just be funding government debt, something the Germans are worried about.
But will it be enough? Market analyst Mike Ingram with BGC Partners in London does not think so: “In a week or so, what we’ll likely to get from the ECB is more “we stand ready” kind of language that may well not be enough. Personally, I’m somewhat sceptical that this is the big bazooka which is really needed to continue to underpin the gains we’ve already seen in European markets over the last three months.”
ECB President Mario Draghi will reportedly flesh out the new bond plan next week but the Bank will not start doing anything until late September at the earliest.
That leaves financial markets on tenterhooks in the run up to key debt auctions in early October.
On Tuesday it was announced that Draghi will not attend the annual Jackson Hole meeting of central bankers at the end of this week.
That is due to a heavy workload as he gears up for a critical policymaking meeting on September 6.
Draghi had been expected to speak at the Jackson Hole gathering, but the retreat in the US state of Wyoming falls just as ECB policymakers are hammering out the details of their new bond-buying plan.
None of the ECB’s six-member Executive Board, the nucleus of the broader 23-man Governing Council, will attend the gathering of top policymakers hosted by the Kansas City Federal Reserve.
However, Bundesbank chief Jens Weidmann still plans to go, the German central bank said.
Get a different perspective
Every story can be told in many ways: see the perspectives from Euronews journalists in our other language teams.