ECB's Draghi presses governments to start bailout fund

FRANKFURT (Reuters) - European Central Bank President Mario Draghi pressed euro zone governments on Friday to kick-start their EFSF rescue fund, resisting pressure from some capitals for the ECB to do more to tackle the bloc's debt crisis.

Draghi expressed exasperation at the slow progress made by euro zone governments in getting the European Financial Stability Facility up and running.

He pointed out that European Union leaders had decided to launch the EFSF more than a year and a half ago, subsequently decided to make the full EFSF guarantee volume available, and decided to leverage the resources of the fund four weeks ago.

"Where is the implementation of these long-standing decisions?" Draghi asked in a speech to the European Banking Congress in Frankfurt.

"We should not be waiting any longer," he added in the text of his speech, although he did not actually say that line.

Governments want to strengthen the rescue fund to fight the crisis and have set a December deadline to bolster its firepower but these efforts have been undermined by delays, surging borrowing costs and scant investor interest.

The ECB is under intense pressure from world leaders to do more to address the crisis which has now engulfed Italy.

The central bank is using its bond-purchase program to intervene in sovereign debt markets to a limited degree but this has failed to ease all the pressure on Italy's borrowing costs and some countries in the bloc want the ECB to do more.

France and Germany, Europe's two central powers, clashed earlier this week over whether the ECB should intervene more forcefully to halt the euro zone's accelerating debt crisis after modest bond purchases failed to calm markets.

The ECB was buying Italian government bonds in early trading on Friday, traders said. Italian 10-year government bond yields were 4 basis points lower at 6.87 percent after dipping back below 7 percent on Thursday.

Italy's benchmark bond yield has been trading around 7 percent in recent days -- the level that forced Ireland and Portugal to seek bailouts.

Thomas Mirow, president of the European Bank for Reconstruction and Development (EBRD) and a former deputy German finance minister, said the ECB had some role to play in tackling the debt crisis but should not take all the strain.

"ECB action is required but it cannot do the whole job on its own," Mirow said during a panel discussion at the same event as Draghi.

The ECB president, an Italian, repeated the central bank's assessment that downside risks to the economic outlook in the euro area have increased and said the weaker degree of activity would moderate price, cost and wage pressures.

(Additional reporting by Jonathan Gould; Editing by Catherine Evans)