Reuters - Video

Edition: US | UK | IN | CN | JP

Video

France and Spain push for ECB intervention

Thursday, August 30, 2012 - 02:05

Aug. 30 - Spanish and French leaders, Rajoy and Hollande, affirmed their commitment to the euro at a meeting in Madrid, and encouraged the European Central Bank to buy bonds. Joanne Nicholson reports

▲ Hide Transcript

View Transcript

Another day, another meeting between some of Europe's leaders. Spain's Mariano Rajoy is hosting French President Francois Hollande But next week's hotly anticipated European Central Bank meeting is what everyone's waiting for - it's expected the bank's terms of engagement in the bond market will be revealed. And Hollande, along with Rajoy, is in favour of the ECB moving into unchartered territory. (SOUNDBITE)(French) FRENCH PRESIDENT FRANCOIS HOLLANDE, SAYING: "One of the missions of the European Central Bank is the price stability. Another ECB mission is the monetary policy. When you see such wide gaps in yields without a justification from the economic point of view, I think that could be a justification for an intervention in the name of monetary policy." A successful Italian bond auction on Thursday suggested growing confidence among investors. Italy sold more than 7 billion euros of debt, and its 10-year yield was well under the 6 percent pain threshold. ECB President, Mario Draghi, has said the bank will buy bonds but only after a country makes a request for aid from the euro zone's rescue fund. And he's also got to keep Germany happy - it sees the policy is a disguise for financing governments. Spain's Rajoy still insists he doesn't need anything other the already agreed 100 billion euro bank bailout - at least not until the the ECB's strategy becomes clear. But he's also promising to not to hit Spaniards too hard (SOUNDBITE) (Spanish) SPANISH PRIME MINISTER MARIANO RAJOY, SAYING: "I'm telling you now that in the next budget I will not raise either personal income tax or value-added tax. We will try to draw up a budget that allows us to meet our deficit promises with the European Commission." But another Spanish region - Catalonia - called for government help this week, and the recession there is deepening, making the need for a Spanish bailout ever more likely. Joanne Nicholson, Reuters

Press CTRL+C (Windows), CMD+C (Mac), or long-press the URL below on your mobile device to copy the code

France and Spain push for ECB intervention

Thursday, August 30, 2012 - 02:05