European Central Bank President Mario Draghi said on Tuesday that the ECB will not print money to solve the eurozone debt crisis. “The ECB can not initiate monetary financing and can not replace what other member states must do… it is too easy to believe that the ECB may replace government’s action or lack of, by printing money. That will not happen,” said Mario Draghi for the Committee on Economic and Monetary Affairs.
Mario Draghi repeatedly said that it is for the governments to put in order the finances and economies. At the ECB’s monetary policy meeting last week, Draghi has insisted again that, after the recent anti-crisis measures adopted by the ECB, it is certainly governments’ turn to act now.
“Eurozone makes progress towards achieving a stable and solid foundation. I trust that in October and December leaders will reaffirm their commitment to the irreversibility of the euro, supporting our long-term vision for economic and monetary union,” said President of the European Central Bank.
He warned that the process of adjustment “may be painful in the short term, from a politically and economically point of view”. “I am confident that the eurozone and its members now faced with problems will emerge from the crisis with stronger economies, and this development will benefit all European citizens,” said Mario Draghi. He announced last week that the ECB is ready to buy bonds of eurozone countries if they agree to accept fiscal rehabilitation programs.
Last month, the Governing Council of ECB created a new bond purchase program which will replace the previous program and help the ECB to buy unlimited bonds with maturities between one and three years.
Countries that want the ECB to buy their bonds will have to accept certain conditions that will be partially monitored by the IMF, Mario Draghi said, adding that the acquisition will not result in printing additional money for the 17 euro area countries. Draghi assured that the ECB will help only member states that support and implement strict conditions. He said that eurozone rescue fund will also purchase bonds.
Spain could be the first eurozone country to benefit from the new program of the ECB, although it did not yet officially make a request for a complete package of financial assistance.
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