MILAN: Spain called on Saturday for the euro zone to find a common stance on whether to provide guarantees for the European Central Bank's debt-buying programme after governments dragged their feet and the ECB said the programme risked being less effective.
As part of efforts to spur lending in the euro zone and revive its stagnating economy, the ECB has pledged to buy senior tranches of repackaged debt issues, or asset-backed securities (ABS).
It could also buy riskier, so-called 'mezzanine' tranches if the 18 countries sharing the euro provided necessary guarantees.
But euro zone governments have diverging views on the possibility of granting such guarantees, with Germany flatly refusing and France also expressing reservations. Italy has suggested each country could take its own decision.
"It's important for Europe to find a common position on this," Spain's Economy Minister Luis de Guindos said after a meeting of European Union finance ministers in Milan.
"We need to find a solution, but the solution must be the same for everyone," he said, adding uniform implementation across different countries of the ECB's credit easing measures was at stake.
The ECB announced plans to buy ABS and covered-bonds on Sept. 4 when it unexpectedly cut benchmark interest rates to near zero in a bid to fight too low inflation.
ECB President Mario Draghi said on Friday the boost to credit would be much more effective if mezzanine tranches could be included, though the ECB would press ahead with purchases of high-quality ABS debt without any need for guarantees.
His deputy Vitor Constancio sounded impatient with the governments on Saturday when asked why some were reluctant to guarantee the riskier securities.
"We will do what we announced and then it is up to member states to decide if they want to help to broaden the programme, we have no further comments on that and we will accept whatever is their decision," Constancio told reporters. Germany, backed by the Netherlands, showed no sign of budging.
"We said explicitly, no state guarantees," German Finance Minister Wolfgang Schaeuble said on Saturday. "We didn't dream that the ECB would have to buy asset back securities."
A Franco-German paper dated Aug. 29, circulated ahead of this weekend's meeting, said a scheme of public guarantees for ABS debt would be problematic.
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