PARIS — Euro zone governments and the European Central Bank are preparing to intervene on financial markets to help bring down Spanish and Italian borrowing costs, French afternoon daily Le Monde reported on Friday.
The newspaper, which cited unnamed sources, said the ECB was
willing to take part in the action on condition that governments
agreed to tap the bloc’s bailout funds, the European Financial
Stability Facility and the European Stability Mechanism.
Under the plan, the EFSF could be activated first to
purchase Spanish and Italian debt on the primary market,
followed by the ESM in September, after it becomes operational.
The ECB would at the same time buy Spanish and Italian
government bonds itself on the secondary market.
The newspaper said the plan was days or possibly weeks away
from being finalised and that officials were holding
consultations on Friday about it.
A source close to French President Francois Hollande said
that he planned to speak to German Chancellor Angela Merkel at
around 1100 GMT about implementing decisions taken at a June EU
summit that proposed new measures for tackling the debt crisis.
ECB President Mario Draghi pledged on Thursday to do
whatever was necessary to preserve the euro, sending a strong
signal that it might take action on Spanish and Italian
borrowing costs.
