Draghi Insists ECB Has Done its Part

By TraderVox.com

Tradervox (Dublin) – During the Group of 20 Finance officials meeting hosted by IMF in Washington, European Central Bank officials were put on the defensive by the IMF and US treasury as they asked the ECB to do more to alleviate the situation in Europe. However, ECB officials led by their President Mario Draghi and Bundesbank President Jens Weidmann indicated that they have done their best in cutting interest rates and issuing Long-Term Loans to banks in the region.

In his argument, Draghi said that all the advice given by the IMF have not been discussed by the Governing Council while Bundesbank President insisted in an interview that the problems facing Europe cannot be resolved through monetary policy measures alone. The G-20 meeting has been marred by bickering from all sides about developing new strategies to calm the euro zone debt crisis. Concerns in the 17-nation trading bloc returned amid looming turmoil in the bond market and as traders speculate that Spain may require bailout.

About Spain and Italy, Draghi said that the two nations should agree on further action but Spain hold’s the position that ECB should reactivate its bond buying program. Further, Draghi went ahead to praise Spain and Italy on “remarkable progress made in structural changes. He was, however, quick to point out that the process is far from complete in both countries.

The US government, through its Treasury Secretary Timothy F. Geithner, gave almost well detailed suggestions to the ECB and European authorities asking them to act decisively to put an end to the turmoil in the region. Geithner told the IMF that the success of the second phase of crisis response in Europe is dependent on the willingness and ability of the European Central Bank to use its tools aggressively and flexibly while still remaining creative in its support to countries in the region.

Previous steps taken by the ECB seems to be wearing off hence the need for the need to come up with new measures and steps to prevent possible default in Spain and Italy.

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