Bloomberg News

Liikanen Says ECB Will Act Within Its Mandate to Protect Euro

August 03, 2012

European Central Bank Governing Council member Erkki Liikanen comments on ECB plans to intervene in government bond markets.

He made the remarks in an interview on Helsinki-based broadcaster MTV3.

“The ECB hasn’t let anyone down. President Draghi last week made strong comments, saying the ECB will act within its mandate to strengthen the irreversibility of the euro and to get us out of this crisis. Yesterday, the council gave its support to the President and his remarks.”

“Each country must take measures to boost growth. The member states together need to build tools, we have the EFSF, the ESM. Why? Because even if countries take the required measures, it will take time before it is transmitted to the markets, and some support may be needed here. When this is done, the ECB can act. Yesterday we gave some clear direction to the preparations. ECB can independently act on the secondary markets, this is normal central-bank activity. It will take place at the short end of the curve. We may also take other non- standard measures.”

“The third phase is that when preparations are over, we are ready to act. ECB decision-making is such that it can always act. The ECB is always ready to act.”

“The euro is irreversible and we work each day to get control of the crisis and to get the financial markets operating normally. We’re working to get the euro area onto a path of stable growth where price stability is maintained.”

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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