The OECD has waded into the dispute over emergency measures to prop up Spain and Italy, backing plans for the European Central Bank to buy up debt of struggling eurozone nations.
Europe must exploit the "window of opportunity" offered by the relative calm in the markets to tackle the eurozone debt crisis, the Organisation for Economic Cooperation and Development (OECD) warned.
However analysts now expect the measures to fall short of Mr Draghi’s vow to do “whatever it takes” after the German government had to persuade the influential Mr Weidmann to stay in his post. Stepping up the pressure, fellow German ECB policymaker Jörg Asmussen said the ECB should only buy bonds if the International Monetary Fund was involved in setting an economic reform programme in return.
Analysts expect Mr Weidmann to be outvoted on the ECB next week, but his threat to quit would put Ms Merkel, the region’s power-broker, in an awkward political position as the Bundesbank is revered in Germany.
David Lipton, the IMF’s deputy managing director, has backed Mr Draghi. “He’s got the right idea, the right approach and he needs the conditions under which his action can be effective. He needs the countries of the periphery to be doing what they need to do and then he can act”, he said.
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