(WASHINGTON POST) — Europe was buzzing Monday with reports of yet another plan to save the euro by convincing skeptical financial markets that the continent’s debt-ridden governments are creditworthy enough to merit new loans.
Under the proposal, according to European officials and other experts, the European Union’s financial bailout funds would be used to buy sovereign government debt, particularly from hard-pressed Spain. At the same time, they said, the European Central Bank would make a coordinated round of multibillion-dollar loans to European banks, making cash available not only for business loans but also for government bond issues.
The proposal to use E.U. bailout funds to absorb sovereign debt is not new. It was agreed on, for a second time, at the latest E.U. summit June 29 in Brussels. What is new, the officials and specialists said, is the resolve by E.U. leaders to actually do what they had promised to do, seeking to convince financial markets that this time they mean what they say.