Video Related To: Bonds, Euro Jump on ECB Bond Plan

www.euronews.com The European Central Bank is to buy the government bonds of struggling eurozone countries' like Spain and Italy to lower their borrowing costs, but there will be strict conditions attached. Seeking to back up his July pledge to do whatever it takes to preserve the euro, ECB President Mario Draghi said the new plan, aimed at the secondary market, would address bond market distortions and "unfounded" fears of investors about the survival of the euro. The ECB chief stressed they would only help countries that signed up to and implemented strict policy conditions, with the eurozone's rescue fund also buying their bonds, and preferably with the IMF involved in designing and monitoring the conditions. Draghi said they have to repair Europe's broken borrowing system: "The European monetary area now is fragmented... the actions we have decided today are geared to repairing monetary policy transmission channels... a way of saying it is that these decisions are necessary to restore our capacity to pursue the objective of price stability in the euro area, they are necessary to restore the singleness of monetary policy in the euro area." The new programme will focus on bonds maturing within three years. Potentially there are no limits on it, but Draghi insisted it does not break ECB rules. The Germans are not so sure. Jens Weidmann of the Bundesbank did not support the plan. The Bundesbank chief had expressed concern that intervening in the bond market would break <b>...</b>