ECB chief tells eurozone governments to act fast

ECB chief tells eurozone governments to act fast

PanARMENIAN.Net - European Central Bank chief Mario Draghi told eurozone governments on Friday, November 18, to act fast to get their rescue fund up and running, expressing exasperation at their lack of progress in response to an escalating debt crisis, Reuters reports.

The ECB is under intense pressure to play a greater role in tackling the eurozone crisis. A Reuters poll of 50 bond strategists in Europe and the United States gave an even probability that it would eventually agree to print money.

But Draghi put the onus firmly on governments, saying they had failed to put into practice decisions underpinning the European Financial Stability Facility - the rescue fund which they have promised to give more firepower without yet explaining how.

"Where is the implementation of these long-standing decisions?" Draghi said at a banking conference in Frankfurt. "We should not be waiting any longer."

Many analysts believe the only way to stem the contagion in a crisis that began with Greece but now risks engulfing Italy, Spain and even France is for the ECB to buy up large quantities of bonds, effectively the sort of 'quantitative easing' undertaken by the U.S. and British central banks.

That would be a highly controversial break from its existing policy, where it offsets government bond purchases by draining liquidity from the system in separate operations.

While the ECB, with strong German support, is anxious to remain free from political interference and is resisting calls to take major action in response to the spreading debt crisis, it has made limited bond purchases that have steadied investors' nerves.

European shares trimmed losses, helped by falling Italian and Spanish bond yields after the ECB intervened again to buy debt in the secondary market on Friday.

Deutsche Bank Chief Executive Josef Ackermann said European states could not rely on the ECB to solve the eurozone debt crisis. "The ECB's primary role should not be to take up these bonds," he said.

Euro zone governments have set a December deadline to strengthen the EFSF but these efforts have been undermined by delays, surging borrowing costs and scant investor interest.

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