News Summary: Draghi to detail bond rescue plan

AP News
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Posted: Sep 05, 2012 11:57 AM
News Summary: Draghi to detail bond rescue plan

SUPER MARIO: European Central Bank President Mario Draghi has to strike a delicate balance between detailing how the bank intends to rescue the 17 countries that use the euro from financial disaster.

POSSIBLE PATHWAY: The ECB may buy bonds on the open market, driving up prices and bringing down interest rates, making it cheaper for troubled countries like Spain and Italy to borrow.

POSSIBLE DRAWBACK: Germany's central bank has so far been critical of the bond plans, warning that governments could become addicted to the aid and avoid making unpopular spending cuts and tax increases to get debts under control.