Germans Jens Weidmann and Juergen Stark led a four-man group who opposed the reactivation of the European Central Bank's bond-buying programme, central bank sources said on Friday. Bundesbank chief Weidmann and Stark, who heads the ECB's economics department, are ECB heavyweights whose opposition to firing up the programme after 18 weeks of inactivity could restrict any push to broaden purchases to include Italy's bonds.
Traders said the ECB bought Irish and Portuguese government bonds after deciding on Thursday to revive the programme, a move analysts said was misguided. "If that is the ECB response, it's like the fire brigade responding but driving to the wrong place," said Holger Schmieding, economist at Berenberg Bank. "It doesn't douse the fire and harms the credibility of the fire brigade." Italy, whose 10-year government bond yields rose above their Spanish equivalent on Friday, is now in the eye of the euro zone storm and the size of its economy - it is a member of the G7 club - means the whole single currency project is tied to its fate.
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