FRANKFURT (MNI) – There is reason for optimism about resolution of
the Eurozone debt crisis if recent trends continue, European Central
Bank President Mario Draghi said Friday.
“If we continue going in this, way one has to be optimistic,”
Draghi responded when asked how long the current market calm might last
in the absence of any actual ECB bond market interventions.
The ECB chief was speaking at a joint press conference in Cyprus
with European Commissioner for Economic and Monetary Affairs Olli Rehn,
IMF Managing Director Christine Lagarde and Eurogroup head Jean-Claude
Juncker.
Draghi said that the recent market tranquility should not be
ascribed only to the central bank’s new Outright Monetary Transaction
(OMT) program.
“May things seem to have fallen into the right place,” he said.
There has been “significant progress at the national level in pursuing
the right economic policies in all euro area countries, and now you have
the fully effective backstop mechanism that is meant to remove the tail
risks from the euro area,” he added, referring to the ECB’s recently
announced OMT plan.
It is the combination of all these factors that have eased tensions
on financial markets, Draghi argued.
The ECB president stressed that the new bond buying program was
aimed solely at restoring the monetary transmission mechanism. “What we
are seeing now are the first signs of more normal working but we still
have a long way to go,” he said. Draghi also reminded that any OMT
intervention requires “strict and effective conditionality.”
–Frankfurt newsroom, +49-69-720-142; jtreeck@marketnews.com
[TOPICS: M$$EC$,M$X$$$,M$$CR$]
