European Central Bank In Debt-Buying Pledge

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PostMon Aug 08, 2011 4:12 pm » by Flecktarn

The European Central Bank (ECB) has said it is ready to buy up Spanish and Italian debt in a bid to stabilise European markets.
In a late-night agreement, central bankers from all 17 euro countries agreed the ECB should "actively implement" its controversial bond-buying programme.
The move aims to help limit the interest rate Italy and Spain have to pay on their national debt.
But it is seen by critics as a short-term measure that fails to tackle the root causes of the eurozone debt problem.
In a statement, the ECB said it welcomed the moves by the Spanish and Italian governments to curb spending and cut their budget deficits.
But is said it would start to buy debt due to "dysfunctional" market activity.
The ECB's announcement came as the G7 group of leading economies promised to take action to calm investor fears.
Britain, Canada, France, the US, Germany, Italy and Japan said that co-ordinated efforts were needed in foreign exchange markets because "disorderly movements ... have adverse effects for economic and financial stability."
The G7 meeting followed Friday's downgrading of US debt by rating agency Standard & Poor's and a week in which Europe's debt crisis threatened to spread to core eurozone nations.

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