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European Central Bank

The European Central Bank was established by the Treaty of Amsterdam in 1998 and is headquartered in Frankfurt, Germany. The objective of the bank is to maintain price stability within the euro zone. The president of the ECB is Mario Draghi, former governor of the Bank of Italy.

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ECONOMY

ECB says it has no set limit to bond-buying

PUBLISHED : Monday, 10 June, 2013, 12:00am
UPDATED : Monday, 10 June, 2013, 5:19am

There is no limit to the European Central Bank's bond-buying programme, the bank said yesterday, a day after France's President Francois Hollande announced Europe's debt crisis was over.

The German newspaper Frankfurter Allgemeine Sonntagszeitung yesterday quoted central bank sources as saying the bank had set a limit of €524 billion (HK$5.38 trillion) on the Outright Monetary Transactions scheme.

The bank had also informed Germany's constitutional court, which will weigh the scheme's legality on Tuesday and Wednesday, of that limit, it said.

However, the ECB said: "The report is incorrect. As indicated on various occasions, there are no ex-ante limits on the amount of Outright Monetary Transactions. Their size would be adequate to meet their objectives."

Meanwhile, Hollande told an audience in Japan during a state visit: "You must understand that the crisis in the euro zone is over."

Hollande's comments came a week after thousands of people took to the streets of European cities to vent their anger at the "troika" of international powers whose insistence on austerity is blamed for worsening their economic hardship.

There were angry scenes in Frankfurt near the European Central Bank, and in Spain and Portugal, two of the countries that have received bailouts to help them plug financial holes.

The troika of international lenders, the International Monetary Fund, the European Union and the European Central Bank, have imposed strict conditions on countries such as Greece and Portugal in exchange for bailout funds. In Greece and Spain, the unemployment rate has reached 27 per cent, while Portugal's is forecast to climb to a record 18.2 per cent this year.

Hollande, who was in Tokyo on the first state visit by a French president in 17 years, said Japan and Europe needed to co-operate to forge an economic partnership that would be good for both.

Reuters, AFP

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