Posts Tagged ‘government bonds’
Euro Need More Rescue Funds
European Central Bank head Jean-Claude Trichet to increase defense euro on Friday, describing it as a currency “credible” (credible) that is not in crisis, while calling on EU leaders to increase rescue fund. “I think that we should see that we have a currency that is credible,” Trichet told RTL radio the day after the ECB supports the extension of special measures to overcome the pressure of the euro zone debt.
“There is no crisis for the euro as a currency … We have a problem of financial instability is the result of budget crises in certain countries of Europe,” he said. Trichet also urged EU leaders to improve European Financial Stabilization Facility (EFSF) 440 billion euros (590 billion U.S. dollars) which was formed in May as part of bailout (bailout) debt to Greece and to be taken as part of a rescue package Ireland agreed at the weekend.
ECB wants member states to take actions necessary to ensure that they balance the challenges ahead, Trichet said at a news conference later, pointed to the budgetary and structural policies in addition to a rescue fund. This is very important to be as effective as possible, especially on “the problem of quantity,” ECB chief replied when asked whether the number of EFSF should be improved.
Some analysts have questioned whether the EU will have sufficient funds if forced to save Portugal and Spain, both of which are under strong pressure in the market since Ireland and Greece was saved.
ECB on Thursday its benchmark rate at a record low 1.0 percent but said it would extend emergency funding cheaper for commercial banks to the first quarter of 2011.
Crucially, the ECB also said it would continue to buy government bonds to help reduce pressure on the euro zone countries are financially vulnerable – Belgium, Greece, Ireland, Italy, Portugal and Spain.