Van Rompuy says spread levels unjustified
(ANSAmed) - BRUSSELS, SEPTEMBER 5 - European Council President Herman Van Rompuy said the borrowing costs of some countries at the centre of the eurozone debt crisis, as shown in bond spread levels, does not reflect the economic reality of those states.
"The spread levels of some countries is not always justified by the fundamentals (of thier economies)," Van Rompuy said.
Van Rompuy added that the EU gave "full support" to the European Central Bank for it to carry out a "series of possible" actions to lower the borrowing costs of some countries and ease the crisis.
The ECB is expected to announce plans to buy the bonds of Spain and Italy to bring down spread levels after a policy meeting on Thursday.
On Tuesday the Bank of Italy said the spread between 10-year Italian bonds and the German benchmark should be around 200 basis points, rather than the current level, which is over 400.
The central bank said the reason it was so high was not down to fundamental weaknesses of the Italian economy but "contagion" from the eurozone crisis.
"The spread levels of some countries is not always justified by the fundamentals (of thier economies)," Van Rompuy said.
Van Rompuy added that the EU gave "full support" to the European Central Bank for it to carry out a "series of possible" actions to lower the borrowing costs of some countries and ease the crisis.
The ECB is expected to announce plans to buy the bonds of Spain and Italy to bring down spread levels after a policy meeting on Thursday.
On Tuesday the Bank of Italy said the spread between 10-year Italian bonds and the German benchmark should be around 200 basis points, rather than the current level, which is over 400.
The central bank said the reason it was so high was not down to fundamental weaknesses of the Italian economy but "contagion" from the eurozone crisis.
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