VIENNA (Reuters) - European Central Bank Governing Council member Ewald Nowotny is concerned that euro zone countries will not push through parliamentary approval of changes to their EFSF bailout fund as quickly as planned, an Austrian magazine quoted him as saying.
“I fear the envisaged date of the end of October won’t hold,” Profil quoted him as saying in its August 22 edition.
Member states have to adopt revisions to the European Financial Stability Facility (EFSF) so that it can take over from the ECB the job of buying debt of struggling members on secondary markets if needed.
Nowotny reiterated that the ECB’s bond-buying scheme was “a sensible and effective instrument but not a long-term facility.”
Under changes agreed by euro zone leaders a month ago, the EFSF and its successor — the European Stability Mechanism, which will start operating in mid-2013 — could buy bonds from the secondary market, not just the primary market.
But that will only happen if the ECB gives its go-ahead, declaring exceptional circumstances.
Addressing the difficulty of getting euro zone members to work together and align policy, Nowotny said: “A change of thinking has to take place at the political level. That is admittedly an arduous and often too drawn out a process.”
Reporting by Michael Shields; Editing by Kim Coghill