Bloomberg: Spain leads Europe’s $25 billion gamble before ECB

03 September 2012

Euro region nations are asking investors to stake more than €20 billion on second-guessing the European Central Bank this week, selling the most debt in two months before Mario Draghi speaks on Thursday.

Spain, France, Austria and Belgium return to the market this week after a month-long pause, with Germany also selling debt. The auctions take place before the ECB’s September 6 meeting in Frankfurt, where Draghi, the central bank’s president, may reveal details of a new bond-buying programme. That makes Spanish debt at this week’s sale unattractive.

Draghi said at the ECB’s August 2 meeting that it’s “unacceptable” for investors to bet against the euro’s future by elevating bond yields. He said that may spur the ECB to buy short-dated bonds in the secondary market, albeit only in concert with direct purchases from governments by Europe’s rescue fund, with accompanying economic conditions. The statement followed his July 26 vow to do “whatever it takes” to defend the shared currency.

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