It appears that the ECB’s top brass are divided over whether or not the recent rise in Spanish bond yields is warranted.
Bloomberg on Wednesday attributed the following comments to ECB executive board member Benoît Coeuré:
European Central Bank Executive Board member Benoit Coeure suggested that the bank could revive its bond-purchase program to reduce Spain’s borrowing costs.
“Market conditions are not justified,” Coeuré said at an event in Paris today. “Will the ECB intervene? We have an instrument, the securities markets program, which hasn’t been used recently but it still exists.”…
…”We have a new government in Spain that has taken very strong deficit measures,” Coeuré said. “All this takes time. The political will is enormous.”
Mr Coeuré’s view that Madrid’s political will is “enormous” contrasts somewhat with comments made by his boss, ECB president Mario Draghi at last Wednesday’s presser, which suggested that market pressure was justified both by economic fundamentals and the Spanish government’s inaction.
