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Frankfurt - The European Central Bank (ECB) resisted pressure on Thursday to announce a major bond-buying programme to contain the eurozone debt crisis, despite the risk it could disappoint investors worried about Portugal and Spain.
The ECB had faced calls to rush through new anti-crisis measures at its monthly policy meeting after an €85bn EU-IMF rescue of Ireland failed to dispel fears that other indebted countries in the single currency area could soon require a bailout.
ECB President Jean-Claude Trichet said the bank had decided to keep interest rates on hold and extended its liquidity safety net for vulnerable eurozone banks, but made no mention of increasing its government bond buying programme.
The ECB started purchasing bonds through its Securities Market Programme (SMP) in May, after Greece was bailed out.
Trichet said the policy would continue but declined further comment on it.
"I say we are constantly alert. We are constantly looking at the situation of the markets," Trichet told a news conference.
"The Securities Market Programme is ongoing, I repeat - ongoing ... I won't comment on the observations of market participants."
The premium investors demand to buy Portuguese and Irish debt over German benchmarks fell on Thursday with traders saying the ECB had been buying the two countries' bonds.
Suggestions that the ECB could agree new measures helped the euro stabilise and lifted stock markets but analysts said any failure to announce new action could disappoint investors.
The euro fell and Bund futures hit a session high after Trichet gave no indication the ECB was considering increasing its government bond buying programme.
German Economy Minister Rainer Bruederle said before the ECB's meeting that extra liquidity alone would not resolve Europe's problems and described the last US fiscal stimulus package, injecting more money into the economy, as excessive.
"Permanently printing money is not the solution," Bruederle said. "The money presses must not fall into the hands politicians."
Euro in Danger?
Some economists say the future of the euro is in doubt and fear contagion to Asia and the US.
IMF chief Dominique Strauss-Kahn, visiting India, said the situation in Europe was "serious" and the IMF was ready to provide financial and technical support to member states if needed.
But EU leaders deny the euro will collapse and dismissed reports on Thursday that they would call a special summit this weekend on the crisis.
Spanish Prime Minister Jose Luis Rodriguez Zapatero said Madrid would not need to tap any European Union funds to help it through its debt problems.
A Spanish bond auction was well received, partly because of hopes linked to the ECB meeting and Bruederle said there was a good chance Lisbon and Madrid would not need rescuing.
The ECB had faced calls to rush through new anti-crisis measures at its monthly policy meeting after an €85bn EU-IMF rescue of Ireland failed to dispel fears that other indebted countries in the single currency area could soon require a bailout.
ECB President Jean-Claude Trichet said the bank had decided to keep interest rates on hold and extended its liquidity safety net for vulnerable eurozone banks, but made no mention of increasing its government bond buying programme.
The ECB started purchasing bonds through its Securities Market Programme (SMP) in May, after Greece was bailed out.
Trichet said the policy would continue but declined further comment on it.
"I say we are constantly alert. We are constantly looking at the situation of the markets," Trichet told a news conference.
"The Securities Market Programme is ongoing, I repeat - ongoing ... I won't comment on the observations of market participants."
The premium investors demand to buy Portuguese and Irish debt over German benchmarks fell on Thursday with traders saying the ECB had been buying the two countries' bonds.
Suggestions that the ECB could agree new measures helped the euro stabilise and lifted stock markets but analysts said any failure to announce new action could disappoint investors.
The euro fell and Bund futures hit a session high after Trichet gave no indication the ECB was considering increasing its government bond buying programme.
German Economy Minister Rainer Bruederle said before the ECB's meeting that extra liquidity alone would not resolve Europe's problems and described the last US fiscal stimulus package, injecting more money into the economy, as excessive.
"Permanently printing money is not the solution," Bruederle said. "The money presses must not fall into the hands politicians."
Euro in Danger?
Some economists say the future of the euro is in doubt and fear contagion to Asia and the US.
IMF chief Dominique Strauss-Kahn, visiting India, said the situation in Europe was "serious" and the IMF was ready to provide financial and technical support to member states if needed.
But EU leaders deny the euro will collapse and dismissed reports on Thursday that they would call a special summit this weekend on the crisis.
Spanish Prime Minister Jose Luis Rodriguez Zapatero said Madrid would not need to tap any European Union funds to help it through its debt problems.
A Spanish bond auction was well received, partly because of hopes linked to the ECB meeting and Bruederle said there was a good chance Lisbon and Madrid would not need rescuing.
