|
|
Draghi said that the ECB won’t start intervening in bond markets until governments like Spain request a bailout and agree to conditions. He also ruled out allowing the ECB to take losses in any further Greek debt restructuring and damped speculation of another ECB interest-rate cut. Draghi said his bond purchase plan, called Outright Monetary Transactions, has already lowered borrowing costs for sovereigns across Europe. “Today we are ready with our OMT”, he said. “Now it’s really in the hands of governments.”
Draghi praised Spain for making “significant progress” in addressing its problems and said the conditionality involved in a rescue package doesn’t necessarily need to be harsh. “There is a tendency to identify conditionality with harsh conditions”, he said. “Conditions don’t need to be necessarily punitive.” That may appease Italian Prime Minister Mario Monti, who cautioned last week that aid shouldn’t hinge on more austerity.
Draghi also pushed back against pressure to extend the repayment terms on its Greek government bond holdings, saying it would “qualify as monetary financing”. Greek Prime Minister Antonis Samaras called on the ECB to roll over any Greek debt it holds.