By The Associated Press, Associated Press
FRANKFURT, Germany (AP) — European Central Bank President Mario Draghi unveiled a new program Thursday to buy government bonds to bring down the borrowing costs of some countries.
Here are some highlights of the things he said:
— THE NEW PROGRAM
Draghi said the bond purchases will help the ECB transmit its monetary policy throughout the 17-country eurozone. High borrowing rates in countries like Spain and Italy are preventing that.
"We will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability."
— SAVING THE EURO
Draghi reiterated the statement that he and European leaders have made repeatedly in recent months to underline their determination to solve the financial crisis. "The euro is irreversible."
Countries that would like the ECB to buy their bonds would have to terms dictating certain aspects of their budget policies. Draghi called it "strict and effective conditionality."
— ECB MANDATE
Draghi noted that the purchase of bonds is identified in the ECB's statute as one of its monetary policy tools. "So we are not creating here any new thing."
— ECONOMIC OUTLOOK
Draghi said economic activity is expected to remain weak for the rest of 2012 and to struggle to bounce back. "We expect the euro area economy to recover only very gradually."
Oil prices are keeping inflation above the 2 percent target in the short term, but that is not expected to last. "Underlying price pressures should remain moderate."
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