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Mixed messages on euro zone debt & Greece

Friday, March 27, 2015 - 02:09

ECB chief Draghi says bond-buying is working, but the BUBA's Jens Weidmann makes a timely warning ahead of Greece's next bid to unlock more finance from its lenders. David Pollard reports.

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EDITORS PLEASE NOTE: THIS EDIT CONTAINS MATERIAL WHICH WAS ORIGINALLY 4:3 A mix of messages on the euro zone. Some good, some not so good - and some denied. First, ECB bond buying. Mario Draghi told the Italian parliament his one-trillion euro programme of asset purchases - and other easing measures - is doing the trick. (SOUNDBITE) (Italian) EUROPEAN CENTRAL BANK (ECB) PRESIDENT, MARIO DRAGHI, SAYING: "The profile that we see at the moment gives us some comfort and optimism as the monetary policy is reinforcing the cyclical recovery. I insist on saying 'cyclical' because this recovery is not structural." One analyst said Draghi's assurance should be taken with a pinch of salt. But if buying debt may yet prove the euro zone's salvation, the size of it out there is something even harder to swallow. That sentiment from Bundesbank chief, Jens Weidmann. He warned a conference in Frankfurt that the euro zone's entering the 'danger zone'. Exposure to a single sovereign, he says, must be capped. For IG market strategist Alastair McCaig, the comments are about a debt problem with a capital 'G'. (SOUNDBITE) (ENGLISH) IG MARKET STATEGIST ALASTAIR MCCAIG SAYING: ''This has highlighted itself on what's been going on with Greece and the likelihood or possibility that they might ultimately leave the euro zone and the ramifications that would have to their debt. I think there's very much a question mark of learning the lessons of yesteryear and trying to ensure that it doesn't happen again.'' Greece reprises a familiar theme of trying to unlock further aid finance from its lenders on Monday. A list of reforms it's due to present will, it's thought, include measures to boost tax revenues and investor sentiment. Yanis Varoufakis might not be involved , according to Germany's Bild online version - it reports the Greek finance minister as close to resigning. (SOUNDBITE) (ENGLISH) IG MARKET STATEGIST ALASTAIR MCCAIG SAYING: ''The sheer fact that we're seeing rumours and speculations over the Greek finance minister ... highlights how unconvinced I think European investors are over Greece's ability to come up with a rescue package that will get the approval of most of its euro zone counterparts.'' Greek officials have denied the speculation over Varoufakis. Such reports, they say, 'far from reality'.