European Central Bank president Jean-Claude Trichet told German weekly magazine Der Spiegel that the bank's program of buying government bonds was temporary. "We will not do this forever. This measure is, like all our extraordinary measures, temporary," he told Der Spiegel.
Figures released earlier this week showed the ECB bought no government bonds in the previous week. The ECB began buying government bonds on the secondary market last May to counter the sovereign debt crisis which began in Greece, spread to Ireland and is now threatening Portugal. Euro zone leaders agreed on Saturday to overhaul the single currency area's financial safety net, a move they hope will help draw a line under the sovereign debt crisis.
On Friday Trichet pleaded to extend the European Financial Stability Facility from 250 million euros to 440 million euros, the magazine said. The ECB would consider making concessions to debtor countries if they implement austerity measures, and interest payments may be reduced, support measures extended and the duration of existing loans lengthened, the magazine said.
Trichet justified warning markets about possible rate hikes by telling Spiegel: "Price stability is according to the EU treaty our main priority." Earlier this month Trichet said the ECB may hike rates next month, far earlier than markets had expected.
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