BRUSSELS, Aug. 8 (UPI) — The European Central Bank said it would buy Italian and Spanish bonds and eurozone countries would have to call legislative sessions on the financial crisis.
In a series of telephone conference calls in the past three days, ECB officials and EU ministers discussed ways to calm market fears after the Standard & Poor’s ratings agency downgraded the U.S. debt from AAA to AA+ last week, EUobserver.com reported Monday.
French and German leaders, in a statement, urged eurozone legislative bodies to meet to ratify a July agreement on expanding the powers of the bloc’s $625.1 billion bailout fund.
Ratification of the fund’s upgrade is considered vital for the European Central Bank to buy Italian and Spanish debt, the EUobserver.com said.
Despite the move, analysts said questions remain about whether the internally divided bank can sustain a battle against market forces as it seeks to preserve its independence, MarketWatch.com reported.
“With [eurozone] politicians offering nothing new over the weekend, the ECB has once again been backed into a corner to save the euro,” said Chris Scicluna, deputy head of economic research at Daiwa Capital Markets. “But by doing so, it has further undermined its credibility as an independent central bank.”