ECB ready to buy Spanish, Italian debt: France

PARIS (AFP) : The European Central Bank is ready to buy Spanish and Italian government debt to try and stem the eurozone crisis, French Finance Minister Francois Baroin said Monday.

The ECB said Monday it was ready to buy eurozone bonds following market turmoil last week but did not explicitly say it would buy Italian and Spanish bonds to ease pressure on the third- and fourth-biggest eurozone economies.

Budgetary measures announced at the weekend by Spain and Italy “have enabled the ECB to consider that, given that they are moving in the right direction, it was legitimate to help them,” Baroin told Europe 1 radio.

“The ECB ... has without ambiguity announced its intervention to buy Italian and Spanish debt if it should happen that investors withdraw,” he said.

“We have a duty, an obligation, a requirement to return to an acceptable deficit level,” Baroin added.

The minister also insisted that there was “no doubt” about the determination of the 17 nations sharing the currency to implement a plan agreed on July 21 to stem contagion of the euro debt crisis.

The plan included a second debt rescue for Greece and measures aimed at bolstering the euro’s defences as a whole.

Some of the measures are highly technical and also require parliamentary approval by member states which will take some time, especially with many officials away on their summer holidays.

Pressure on Italian and Spanish government debt eased sharply Monday after the ECB announced it was ready to buy eurozone bonds.

The ECB said it would “actively” renew eurozone bond purchases after Italy and Spain announced fresh measures and reforms to bolster their economies and tackle debt problems which had pushed their borrowing costs to record highs.