The European Central Bank (ECB) will not resort to “higher inflation rates” to resolve the euro zone debt crisis and only “intervene” in the bond markets to ensure the solvency of a country, ECB President Mario Draghi told Germany’s public broadcaster ZDF late Monday.
His comments come ahead of the first day of hearings in Germany’s top court on the legality of the ECB’s bond-buying program, which is widely credited with drawing a line under the region’s debt crisis.
ECB members appear to have launched a charm offensive in German mainstream media to assuage the Germans’ deeply rooted concerns about inflation and to gain public approval for the ECB’s Outright Monetary Transactions (OMT) program that was launched in August last year.
Draghi told ZDF that the ECB would only intervene in the bond markets if there is a “confidence crisis in the euro which is threatening the solvency of a country, not beyond what their fundamentals are. But we won’t intervene to ensure solvency if states are profligate.”
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