ECB to resist pressure for new steps to fight crisis

The recovery for most of the euro zone will certainly begin in the second half of 2013 PARIS — The eurozone’s crisis is far from over and its members must consolidate their budgets and forge a banking union to put the bloc on a more stable economic footing, the leaders of the IMF and European Central Bank said on Friday.

TODAY'S biggest news is the word that the European Central Bank is intervening in European debt markets in force, buying up Spanish- and Italian-government debt. The ECB spent last week expressing reluctance to take this step, but without it, the euro crisis threatened to spin irretrievably out of control. What are these purchases all about, and will they work?

FRANKFURT — The European Central Bank kept interest rates steady on Thursday and is likely to eschew dramatic action to help Italy or other eurozone countries, despite the threat of political turmoil in Rome reigniting the bloc’s debt crisis. At its monthly policy meeting, the ECB held its main refinancing rate at a record-low 0.75%, in line with what the majority of economists in a Reuters poll had expected. The attention turns now to a 8:30 a.m. news conference, held by ECB President Mario Draghi, himself an Italian.

FRANKFURT (Reuters) - The European Central Bank will hold interest rates at a record low of 1 percent on Wednesday and resist German pressure to flag an exit from its crisis-fighting mode as the euro zone recovery looks increasingly fragile and concerns grow about Spain. Germany's powerful Bundesbank has led a push by central bankers from the euro zone's core for the ECB to begin preparing an exit from crisis measures that have seen it loosen the rules for tapping ECB funding operations. ...

The EU has accused Spain of overstating its 2011 budget deficit thus making it easier to make progress in 2012. Furthermore the EU is upset about delays in austerity measures ahead of regional elections next month.

The head of Austria's central bank, Ewald Nowotny, and German finance minister Wolfgang Schaeuble have both made statements over this weekend that affect bailout options for Spain. In particular, Nowotny says Spain must seek help before ECB buys bonds. Spain would have to apply for a rescue package before qualifying for inclusion in the European Central Bank's plan to buy debt of struggling euro zone members, ECB policymaker Ewald Nowotny said.

Get ready for record low interest rates in Europe as ECB ready to push boundaries of crisis role A Reuters survey of 73 analysts showed a 60-percent chance the ECB will cut rates by 25 basis points to a record low of 1.0 percent -- a floor it previously reached during the financial crisis in 2009. It cut rates by a similar amount in November.