ECB's Draghi presses governments to act on crisis

Fri Nov 18, 2011 10:15am EST
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By Sakari Suoninen and Eva Kuehnen

FRANKFURT (Reuters) - European Central Bank President Mario Draghi pressed euro zone governments on Friday to kick-start the bloc's EFSF rescue fund, showing exasperation at their slow progress and resisting pressure for the ECB to do more.

Other senior ECB policymakers joined Draghi in pushing the governments to act, saying the central bank should not be asked to go beyond its mandate of delivering price stability.

The concerted push from the ECB followed an escalation in pressure on the bank this week to play a greater role in tackling the crisis, which has engulfed Italy and threatens to tear apart the single currency project involving 17 countries.

A Reuters poll on Friday gave an even chance the ECB would start printing money to prevent a further escalation.

Draghi pointed out that European Union leaders had decided more than a year and a half ago to launch the EFSF, then to make the full EFSF guarantee volume available, and four weeks ago to leverage the resources of the fund.

"Where is the implementation of these long-standing decisions?" Draghi asked in a speech to the European Banking Congress in Frankfurt.

"We should not be waiting any longer," he added in the text of his speech, although he did not actually say that line.

Governments want to strengthen the rescue fund to fight the crisis and have set a December deadline to bolster its firepower, but these efforts have been undermined by delays, surging borrowing costs and scant investor interest.   Continued...