ECB may take decisive anti-crisis measures

08:33, December 03, 2010      

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Speculation is growing, that the European Central Bank will take decisive measures, to allay continuing concerns, over the debt crisis. The recent bailout package for Ireland, has left, many investors nervous.

It's not just snow swirling around the headquarters of the European Central Bank.

As worries spread about the euro zone crisis, there's speculation the ECB could take decisive steps to stop the global concerns about contagion.

The multi-billion euro rescue package for Ireland hasn't impressed investors who're still targetting Portugal, Spain and Italy.

There's talk the ECB could unveil new anti-crisis measures after it meets on Thursday.

That could include new purchases of government bonds, which the ECB also did in May after Greece was bailed out.

These rumours gave the euro a small boost but Portugal's borrowing costs rose in a fresh bond auction.

Justin Urquhart-Stewart from Seven Investment Management says bond buying is helpful, but not enough.

He said, "It's all very well for the ECB and the politicians to say we'll put up the money, or we'll make sure that there are bailouts in place, albeit reluctantly, that doesn't solve the underlying problem. So bonds will help, but ultimately, what you really need to do is get those disciplines back in place."

The ECB has refused to comment on any new bond purchasing programme.

But increasing numbers of economists are saying it might need to take decisive action as the future of the euro could be on the line.



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