Draghi says new ECB bond-buying won't generate inflation
November 7, 2012 Ansa
European Central Bank (ECB) President Mario Draghi said on Wednesday that a new program to help reduce the spread between the eurozone's weaker economies and Germany "will not generate inflation".
Speaking in Frankfurt, Draghi said that the program, whereby the ECB buys sovereign bonds from weaker eurozone economies like Italy and Spain, will not "create greater risks for German taxpayers".
To help protect the euro from speculative threats, Draghi in August had suggested that the ECB was prepared to purchase "unlimited" quantities of sovereign bonds.
German politicians and members of the country's central bank have expressed concern that bond-buying actions by the ECB could stoke inflationary pressures and leave Germany to foot the bill should any creditor country default. Draghi, speaking during a banking forum, said that "unlimited" bond buying does not necessarily mean "uncontrolled". Countries who request the ECB to buy their bonds must also adhere to "strict conditions" in return, Draghi reminded attendees at the forum.