PARIS/FRANKFURT (Reuters) – Pressure mounted on Wednesday for the European Central Bank to intervene more decisively after financial markets judged that yet another EU summit had failed to resolve the euro zone’s debt crisis.
But Germany’s powerful central bank chief, Jens Weidmann, an influential voice in the ECB, made clear his opposition to ramping up the ECB’s purchases of euro zone government bonds.
He also said the Bundesbank would only provide fresh funds for the International Monetary Fund to help fight the euro zone crisis if countries beyond Europe did so too.
The euro sank to an 11-month low against the dollar, stocks slid and Italy had to pay a euro era record yield to sell 5-year bonds as nervous investors awaited a possible credit rating downgrade for one or more euro zone countries. <GVD/EUR>
Rome had to pay 6.47 percent to sell 3 billion euros of bonds, up from a record 6.29 percent a month ago, highlighting fierce market pressure ahead of a year in which Italy has a gross funding goal of 440 billion euros starting in late January.