ECB is
now it the wait for a hint to use the newly found programme for purchasing
bonds. Its main rate was held at 0,75%, postponing cuts in the cost of
borrowing. The wait could turn out longer than expected, now that Spain has
completed successfully this year’s funding on capital markets.
ECB is
ready to purchase bonds of governments with unpaid debts like for example Italy
and Spain, as soon as they are signed up to a programme of bailout with tight
conditions, under OMTs. Requests have still not been made, yet markets were
eased by the announcement.
Draghi
explained at a news conference that it is expected for the activity of the
economy within the eurozone stay weak, although it’s being supported by their
position of monetary policy. The confidence of the financial market has
definitely improved.
In the 4th
quarter, the economy of the eurozone will shrink, according to some recently
released data. The only response by the ECB would be the cutting of rates.
Survey evidence did not give any hints for stabilisation within this year and
the euro zone remains at risk.
ECB’s
forecast for the GDP next month will be downgraded. In 2013 the inflation will
fall below 2%. The ECB will try to ensure that a looser policy finds its way to
households and companies in the eurozone. The new plan for purchasing bonds is
the definitive tool of the ECB. However, it will only activate if a government
of the eurozone requests aid from the rescue fund of the bloc, given that it
embraces strict supervision internationally. The president of the ECB said that
he could not imagine a scenario, extreme enough for the banks to begin
purchasing bonds with no conditions.
Policymakers
and investors of the eurozone are making Spain ask for help, but Mariano Rajoy
– the Prime Minister refuses to do so. He says that he has to be assured that
the ECB will bring down the debts of the country.
4.8 bln euros of
Spanish debt were sold. That would include Spain’s first issue in the long term
of eighteen months. This would do to complete this year’s financing programme
as well as start raising next year’s funds.
