BRDO PRI KRANJU, Slovenia, Oct 4 (Reuters) - The European Central Bank is ready to buy the bonds of euro zone member countries that admit themselves into fiscal rehabilitation programmes, ECB President Mario Draghi said on Thursday.
“Outright monetary transactions (bond buying) will enable us to provide, under appropriate conditions, a fully effective backstop to avoid disruptive scenarios with potentially severe challenges for price stability in the euro area,” Draghi said after the bank kept euro zone interest rates at 0.75 percent.
“We are ready to undertake OMTs once all the prerequisites are in place.”
“As we said last month the Governing Council will consider entering into OMTs to the extent they are warranted from a monetary policy perspective as long as programme conditionality is fully respected.”
The ECB unveiled last month its plan to buy the sovereign bonds of stricken euro members if they applied for aid from their European partners and agreed to strict conditions for economic reforms.
Spain has been widely seen the primary candidate to apply for such aid, but has so far resisted making the move.