What have you always wondered about the economy? Tell us
European Debt Crisis

ECB’s Mario Draghi unveils bond-buying plan

Stephen Beard Sep 6, 2012
HTML EMBED:
COPY
European Debt Crisis

ECB’s Mario Draghi unveils bond-buying plan

Stephen Beard Sep 6, 2012
HTML EMBED:
COPY

Updated at 10:51 a.m. EST

The European Central Bank has unveiled its plan to save the euro. The bank’s president Mario Draghi said this morning that the ECB will buy European government bonds in an effort to stem the debt crisis.

Draghi said it will buy the government bonds of struggling eurozone countries in order to bring down their borrowing costs. These purchases would, in his words, be “unlimited.” But this won’t be a free lunch for the countries concerned, like Spain Or Italy. In return, they would have to accept strict budget rules. Draghi said the new plan would combat speculation against the euro.

“We will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area,” said Draghi.

Investors warmly welcomed the plan. Analysts said it could bring some calm back to eurozone financial markets. But while the speculation may subside,  few believe that Europe’s long running debt crisis has been finally laid to rest.

 

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.