With the EUR holding steady onto gains in speculation the market may see stronger action by the ECB, Reuters has learnt thru the Sueddeutsche Zeitung newspaper over the weekend, that Mr. Draghi and Co. are indeed planning to resume purchases of Spanish bonds to ease the interest burden
As read in Reuters: "The Munich-based newspaper said it had learned from sources in Brussels that the ECB could now become active through the European Financial Stability Facility (EFSF) on behalf of euro zone countries. The ECB could become active immediately as soon as a request from Spain reached euro zone countries. "It is evidently ready to make this step," the newspaper said, without attribution."
Juncker “No time to lose” - Sueddeutsche
Eurogroup head Jean-Claude Juncker said in interviews with Germany's Sueddeutsche Zeitung and France's Le Figaro over the weekend that he sees the euro zone is entering a critical point of the debt crisis and that leaders will be now working very actively with the ECB to streghten the commitments for the irreversibility of the single currency.
Juncker said they had "no time to lose," and that some immediate measures had to be taken to reduce the Spanish bonds risk premium.
On the controversial question of whether Germany will ultimately accept to see the Euopean periphery bonds purchasing program by the ECB being activated, Juncker answered:
- Quotes extracted from Reuters -
"I have no doubt that we will implement the agreements of the last summit. We still need to decide what we will do when. That depends on the developments of the next days."
"We will work in close agreement with the ECB, and we will, as Mario Draghi said, see results. I don't want to drive expectations, but I must say, we have reached a decisive phase."
"The euro countries have reached a point where we have to use all means possible to show that we are determined to protect the stability of the euro zone... nobody should doubt the will of those involved, to prove our determination," Juncker said.
German FinMin throws cold water on ECB bond buying rumours
However, some still believe this is simply a castle of speculation being built on the sky about the ECB rumors that it would begin buying Spanish debt, and that it may end up being a bluff. The skeptic ones may not be wrong after all if one is to be guided by the latest German press reports from Spiegel and Handelsblatt:
From Spiegel:
Federal Finance Minister Wolfgang Schäuble (CDU) has now dismissed the reports in an interview with the newspaper "Welt am Sonntag". "No, at this speculation is not true," Schäuble said the newspaper. The Finance Minister said it was already a sufficiently large aid package for Spain have been laced."The short-term financial requirements of Spain is not so great", said Schäuble, "the painfully high interest rates - but the world will not, if you have to pay for some bond auctions a few percent more."
From Handelsblatt:
When asked whether there would soon be a motion to allow the euro rescue could buy Spanish government bonds, Schaeuble said the "Welt am Sonntag", "No, at this speculation is not true."
"The short-term financial requirements of Spain is not so big," he said. "The high interest rates are painful, and they create a lot of anxiety -. But the world does not go under if you have to pay for some bond auctions a few percent more," You have "tied aid package big enough" for Spain. The country receives for the recapitalization of its banks up to 100 billion €. "And we have them provided 30 billion euros in rescue EFSF as a possible emergency," said the Minister
