Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News  >  Markets

News : Markets

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance ProfessionalsCalendarSectors 

Dow Jones Industrial Average : Europe must act strongly to tackle crisis: OECD

share with twitter share with LinkedIn share with facebook
share via e-mail
0
09/01/2012 | 02:41am CEST
Structure showing the Euro currency sign is seen in front of the ECB headquarters in Frankfurt

Backing bond market intervention by the European Central Bank, the OECD said on Friday that Europe must seize a "window of opportunity" offered by the relative recent calm of financial markets to tackle the simmering euro zone debt crisis.

"I think it is now time that the European authorities push strongly toward a solution," said Pier Carlo Padoan, chief economist of the Paris-based Organization of Economic Cooperation and Development.

The OECD represents a respected outside voice on how best to tackle the 2-year crisis, and his comments come just days before the ECB meets to weigh controversial bond market purchases.

Padoan said the OECD had been braced for a very rocky August for euro zone financial markets, particularly for Spanish and Italian bonds, but this volatility had not emerged and stock markets were in fact now stronger.

"It is time to exploit what seems to be a credit-opening from markets on the European situation, so it is very important that authorities exploit this window of opportunity," he told Reuters in an interview.

Padoan, speaking on the sidelines of the annual Jackson Hole policy retreat hosted by the Kansas City Fed, also made clear his support for bond-market buying by the European Central Bank.

With less than a week to go before the ECB could decide to intervene directly to prop up Spanish and Italian bond markets, Padoan said he did not believe the wide bond spreads of weaker southern European nations reflected economic fundamentals, but rather the fear that the euro zone could break up.

"If that is correct, then the response to that spread has to deal with reassuring markets that the euro zone will not break up, in addition to the fact that those countries must continue with their structural adjustments," he said.

"So intervening in bond markets, it is a very important temporary backstop to a wider strategy," he said. "If the ECB comes up with proposals that provide concrete content to the ideas about support of bond markets, that would be extremely important."

The ECB meets on September 6 to review a plan to buy Italian and Spanish bonds in order to win breathing space for euro zone leaders to figure out a longer-term response to the euro zone's sovereign debt woes.

The plan has met stiff opposition from Germany's Bundesbank, whose president, Jens Weidmann, was also attending the conference in Grand Teton National Park in Wyoming. Weidmann declined to comment to reporters here about a German press report that he had considered resigning over the issue.

(Reporting By Alister Bull; editing by Todd Eastham)

By Alister Bull

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news "Markets"
10:40pDJMARKET SNAPSHOT : Dow, S&P 500 End At Records, Boosted By Health Care Stocks
10:22p TSX edges higher on financial shares, Bombardier
10:10p WALL STREET STOCK EXCHANGE : Wall St. ends little changed; Dow brushes 23K milestone
08:59p U.S. dollar up, yield curve flat, on inflation; stocks mixed
08:59p U.S. dollar up, yield curve flat, on inflation; stocks mixed
08:58p U.S. dollar up, yield curve flat, on inflation; stocks mixed
06:48p European shares slip from highs as results, commodities weigh
06:39pDJLONDON MARKETS : FTSE 100 Ends Lower As U.K. Inflation Hits 5-year High
06:27pDJEUROPE MARKETS : European Stocks Slip As Health-care Stocks Fall Back After Earnings
06:00p FTSE inches down, Merlin collapses on poor summer trading
Latest news "Markets"
Advertisement