Finland Prime Minister says still against ECB bond buys

13 Aug, 2012

Finland remains critically opposed to the European Central Bank's readiness to buy Spanish and Italian sovereign bonds as a means to battle the euro zone debt crisis, Prime Minister Jyrki Katainen told German magazine Der Spiegel.
In an interview with the newsweekly that appeared on Sunday, Katainen said other solutions were needed, because in the past ECB bond purchases had proved to be only a short-term remedy.
"We've got a critical view on that," he said when asked about the possibility the ECB would resume its bond-buying programme. "The European Central Bank purchased sovereign bonds on the secondary market, and it only helped temporarily.
"We're not anti-European when we reject that," Katainen added. "We've got to find other means and ways. The solutions have to be efficient and sustainable."
Katainen told Der Spiegel the interest rates Spain was having to pay were unfairly high "considering the reforms Spain has made or at least announced". He said it was important to find a way to "counter the panic in the markets".
ECB President Mario Draghi has said the ECB may resume buying government bonds as Italian and Spanish borrowing costs vaulted towards levels that could force the euro zone's third- and fourth-largest economies out of the credit markets.
Katainen also expressed his opposition to suggestions that a banking license be provided to the euro zone's permanent bailout fund, the European Stability Mechanism (ESM).
"We're against that," he said. "A banking license would mean there are no limits anymore. It would end up raising the burdens so high that the help wouldn't be credible anymore. I don't think that there are any simply tricks to resolving the crisis."

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