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The Information .com / Zapatero Trichet urged the ECB to buy Spanish sovereign debt
MADRID, 19 (EUROPA PRESS)
The European Central Bank (ECB) has published the letters in August 2011 the then Spanish Prime Minister José Luis Rodríguez Zapatero, and Jean Claude Trichet, who faced his final months in front of the Central Bank eurozone were exchanged.
These letters, whose contents are known partially after the Spanish president last year published the letter received from Frankfurt, reflect the request to the ECB from Moncloa to buy Spanish public debt “in sufficient volume” to stabilize markets.
So, in the letter referring the August 6, 2011 in response to the letter from Jean Claude Trichet the previous day, Zapatero says that the ECB can play a “crucial” role in reducing tensions “through the purchase of Spanish public debt sufficient to stabilize markets and ensure proper operation of the transmission mechanism of monetary policy “volume.
Thus, the proposal made by Zapatero recommended Trichet the ECB keep the impact of these actions until the measures agreed by euro zone leaders in July 2011 in connection with the operation of the European Financial Stability Facility (EFSF), the temporary bailout fund eurozone, were “fully operational “.
Also, the then president of Spain took advantage of its response to Jean Claude Trichet to inform the President of the ECB in the implementation by the Spanish government in a series of measures to strengthen fiscal consolidation and labor market flexibility.
In this regard, the ECB president had raised in his letter to Zapatero the need to undertake “significant steps to improve the functioning of the labor market in order to make progress in reducing a very high rate of unemployment. “
THE DEMANDS OF BCE.
Among the reforms proposed by Trichet measures to reform collective bargaining included abolish clauses indexation between wages and inflation, encourage wage moderation in the private sector and eliminating restrictions on successive temporary contatos and enter for a limited time a form of contract with a very low indmnización pay period.
On the other hand, the then ECB President Zapatero raised the importance of increasing competition in the energy sector, with the aim that prices better reflect costs and to reduce energy dependence of Spain.
Also, Trichet recommended action to boost rental housing, and to increase competition in the services sector through a reform of the regulation of professional services.
“We are confident that the Spanish Government is aware of its very high responsibility for the smooth functioning of the eurozone in the current situation and take decisive steps to restore market confidence in the sustainability of their policies, “concluded Trichet closing his letter.
The epistolary cross between Trichet and Zapatero coincided with the ECB’s decision to reactivate its bond-buying program to acquire debt, mainly from Spain and Italy, worth 22,000 million euros, the largest amount spent so far by the institution, which had kept this program in ‘hibernation’ for 19 consecutive weeks. Also, a week after the ECB would invest 14,291 million euros in sovereign debt and 6.651 million in the next week.
(EuropaPress)
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