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European Central Bank announce bond-buying eurozone scheme

The president of the European Central Bank (ECB), Mario Draghi, has revealed plans for bond-buying in an attempt to ease the eurocrisis.

A scheme to buy government bonds aims to reduce borrowing rates for countries in the eurozone.

Plans to use outright monetary transactions (OMTs) were announced to “address severe distortions”, and fears that Mr Draghi said “originate from … unfounded fears on the part of investors on the reversibility of euro.”

OMTs will be used to protect monetary policy transmission and “ensure the proper transmission of our monetary policy stance”.

ECB’s plan to save the Euro comes alongside expectations for the eurozone economy to deteriorate by 0.4% this year, and improve by 0.5% next year.

Mr Draghi continued: “Under proper conditions we will have a full effective backstop to avoid destructive scenarios with potentially severe challenged for price stability in Euro area.

“We are strictly within our mandate to maintain price stability over the medium term. We act independently in determining monetary policy and the euro is irreversible.”

This was posted in Bdaily's Members' News section by Miranda Dobson .