REVEALED: Terrified ECB Has ‘Emergency Italian Rescue Plan’ Ahead of Referendum
- REVEALED: Terrified ECB Has ‘Emergency Italian Rescue Plan’ Ahead of Referendum
by LANA CLEMENTS, http://www.express.co.uk/
THE European Central Bank (ECB) is ready to step in and rescue the Italian government, if the referendum goes against Prime Minister Matteo Renzi, according to insiders.
Debt-laden Italy has seen its borrowing costs jump ahead of the vote, as investors worry the outcome could throw the economy into chaos. But, if Mr Renzi loses on Sunday, a dramatic sell-off in Italian debt – or so-called bonds – could be triggered, which could send costs for Rome spiralling out of control.
If Italy can’t pay its debts, it faces bankruptcy and would have to turn to the Brussels for a bail-out. However, the ECB is set to to stabilise the government costs after the referendum, by snapping up billions of pounds worth of the bonds – helping to sustain market prices and costs – central bank sources have reportedly said.
The eurozone central bank already hoovers up huge sums of government and corporate debt each month, as part of its money-printing programme designed to kick-start the economy. But the scheme could be used to temporarily increase the amount of Italian bonds bought, said the sources.
The ECB could only fight against immediate market volatility, because the so-called asset-purchase programme is not supposed to be used to rescue individual countries facing a financial crisis. If Rome needed further help, it would need to formally ask the eurozone for help.
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