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ECB to Aid Countries Hit Hardest by Debt Crisis
The European Central Bank has unveiled a plan to buy unlimited amounts of government bonds from countries such as Italy and Spain whose debt crises are threatening the region's economic stability.
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The European Central Bank has unveiled a plan to buy unlimited amounts of government bonds from countries such as Italy and Spain whose debt crises are threatening the region's economic stability.
Economists applaud the plan as the ECB's most ambitious move yet to ease the European debt crisis.
Global markets from New York to Tokyo soared in response to the central bank action. Analysts say investors hope a steadier Europe will import more foreign goods, thus bolstering the world economy. The euro climbed 0.33% against the dollar to $1.264.
The massive debt purchases are expected to drive up bond prices for the affected countries, thus pushing down the interest rates they must pay to finance national debt. Rising bond prices also could attract foreign buyers who have shunned those securities, thus further steadying the economies of those countries.
The ECB will require the governments whose bonds it buys to sign on to a eurozone program of fiscal discipline.
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