UPDATE 1-Finland rejects proposal for ESM, EFSF to buy bonds
SALO, Finland, June 20 (Reuters) - Finland, one of the few remaining triple-A rated countries in the euro zone, does not accept a proposal from Italian Prime Minister Mario Monti for the euro zone's rescue funds to directly buy government bonds.
Italy, at a G20 summit in Mexico on Tuesday, proposed that the EU's rescue funds, known as the EFSF and the ESM, buy bonds of countries such as Spain and Italy in the secondary market to help bring down bond yields and lower refinancing costs.
"These are instruments created to secure liquidity for countries in trouble, and the funds are not sufficient for purchases made in the secondary markets," the country's Prime Minister Jyrki Katainen said on Wednesday.
The idea is expected to be discussed at a meeting of leaders in Rome on Friday. Both facilities have the power to buy sovereign debt, but so far only the European Central Bank (ECB) has been active in purchasing the bonds of stricken euro zone countries, snapping up over 210 billion euros worth of debt since launching the programme in May 2010.