MARKETS reacted negatively yesterday after Mario Draghi, President of the European Central Bank, failed to back up his words about preserving the eurozone with robust action.
The FTSE-100 index ended the day 0.5% down while stock market tumbles across Europe were even more pronounced; Germany's Dax fell 2.2%, France's Cac-40 2.7%, Italy's MiB 4.6% and Spain's Ibex 5.2%. Meanwhile, the borrowing costs of both Spain and Italy surged.
Last week, Mr Draghi raised hopes ,saying the ECB would do "whatever it takes" to preserve the beleaguered eurozone. This prompted speculation Frankfurt would buy government bonds to ease Spain's and Italy's borrowing costs.
However, Mr Draghi appeared to kick the can down the road, saying the ECB stood ready to intervene and would find ways to help struggling countries "over the coming weeks".
He said the ECB would buy shorter-term bonds but assistance would only come once governments had sought help from bailout funds and had promised fiscal reforms.
Analyst Colin Cieszynski said the announcement was "likely to destroy any remaining hopes the crisis can be resolved in the near term."
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