ECB decides to buy EuroZone bonds to curb debt crisis

The European Central Bank (ECB) held a conference call late Sunday ahead of the market opening, pledging the ECB will step in to buy eurozone bonds with efforts to forestall the EuroZone's debt crisis from spreading.

The ECB said it will actively implement its plan to buy bonds issued by eurozone governments on the secondary markets in bids to curb the debt crisis.

The ECB welcomed Italian and Spanish announcement on fiscal and structural reforms and commitment of eurozone countries to contribute efforts to alleviate the impact of the debt crisis.

It is fundamental for member states to "activate European Financial Stability Facility (EFSF) in the secondary market" if ECB recognizes the existence of "exceptional financial market circumstances and risks to financial stability," said the ECB in a statement.

The ECB has, after considering the current situations, decided to "actively implement its Securities Markets Program" to "ensure price stability in the EuroArea," it said.

It is anticipated that the ECB's actual purchase of problematic EuroZone bonds would likely prompt a considerable relief on global markets.

The finance ministers and central bankers of the G-7 member states, Britain, Canada, France, Germany, Japan, Italy and the United States, were expected to talk before the financial markets open in Asia at 0000 GMT Monday.

Germany's Der Spiegel and other journals has been anticipating a "Black Monday" on the markets, in the wake of World leaders' flurry of meeting of phone calls.

German Chancellor Angela Merkel and French President Nicolas Sarkozy issued a joint statement Sunday, expressing their "commitment" to the full implementation of the measures agreed on EuroZone debt at a summit in July.

"In particular through the following instruments: a precautionary program, finance recapitalization of financial institutions and to intervene in secondary markets on the basis of an ECB analysis," the statement said.

They welcomed budget reform plans in Spain and Italy, saying "complete and speedy implementation of the announced measures is key to restoring market confidence."

However, former British Prime Minister Gordon Brown was sharply critical of the mishandling of the spiralling debt crisis, saying that last month's eurozone summit was "yet another European chance of recovery thrown away."

"No number of phone calls can solve what is a financial, macroeconomic and fiscal crisis rolled into one," Brown said to told the Independent on Sunday newspaper, that "Europe needs a radical restructuring of both Europe's banks and the Euro."

"Every time the big questions are avoided, and every time the outcome is a patchwork compromise, the next crisis gets ever closer and threatens even more danger," the former prime minister and finance minister said.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.