ECB German Official Defends Bond Buying Plan

The European Central Bank will only buy a euro zone country’s sovereign bonds if it commits to “hard reforms”, ECB policymaker Joerg Asmussen said on Friday, seeking to soothe German concerns that the central bank is embarking on a risky new strategy.

German media attacked the ECB’s agreement on Thursday to launch a new and potentially unlimited bond-buying program to lower struggling euro zone countries’ borrowing costs and draw a line under the debt crisis, with mass-selling daily Bild running a headline on Friday reading: “Blank cheque for debt states”.

Asmussen, a former deputy German finance minister, took to the airwaves early to stress the conditions tied to the plan.

“(Bond buying) will only take place when the country undertakes tough reform measures. That is a necessary precondition for the ECB to act,” he told Inforadio rbb.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza