BERLIN: Europe is already seeing "positive results" from the European Central Bank's announcement that it stands ready to buy unlimited amounts of bonds issued by euro zone states, ECB President Mario Draghi told a German paper.
But he conceded he still had work to do to convince some in Germany and could address lawmakers there.
Draghi announced last week that the central bank was ready to buy the bonds of euro zone states struggling with soaring borrowing costs provided they put in a formal request for aid and fulfilled strict domestic policy conditions.
"There have already been positive results," he was quoted as saying in Friday's edition of the Sueddeutsche Zeitung. "The announcement of the facility has contributed to raising confidence in the euro area, and in the euro across the world."
"Fund managers are bringing their money back to Europe. This is good for the euro area economy," he said.
Spanish 10-year bond yields have fallen from 7.64 percent on July 24 to 5.62 percent on Thursday. Yields of Italy fell from 6.6 percent on July 24 to 5.03 percent on Thursday.
However, Draghi said the response to his plan was negative in parts of Germany but also in parts of southern Europe, because of the strict conditions. "The rest of the world complimented us," he was quoted as saying.
Some in Germany fear it is exposing taxpayers to billions of euros in risky debt, and Draghi said the opposition stemmed from the country's fear of inflation. Runaway inflation in the 1920s destroyed people savings and contributed to the rise of Nazism.
HINDRANCE
He added he must do more to explain the ECB's strategy as Germans' distrust was a hindrance for its work.
"The obligations that the countries have to meet are the best insurance against risk," he said, adding that the bank would be only buying bonds with short maturities of one to three years. "The risks are well managed. And, in our assessment, doing nothing poses even greater risks."
Asked if he would consider addressing the German Bundestag lower house of parliament, Draghi said: "It would be an opportunity to explain what we do in greater detail ... I would be very happy to go there."
The German central bank chief, Jens Weidmann, opposed the ECB move announced last Thursday and elements of the conservative establishment support his view that the bond-buying plans violate a taboo on financing state deficits.
But German Chancellor Angela Merkel and her finance minister have voiced support for Draghi's bond plan.
Asked if the euro could be saved now Germany's top court had given the euro zone's new bailout fund the green light, Draghi reiterated that individual euro zone states would also have to do their homework. Moreover, together, they would have to complete economic and monetary union.
The euro zone was "on a good path" to solving the crisis, he said: "We see extraordinary progress in reforms in Spain and Italy, particularly if you consider what they have done over the last six months in comparison with what they did not do for many years."
"The direction of policies in many countries was flawed and needed to be corrected. This process is currently under way. But much still needs to be done," he said.
Asked about a visit this week by the Greek Prime Minister Antonis Samaras, Draghi said they had not discussed a haircut on the Greek debt held by the ECB, "but, anyway, I'm against it".
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