2012-08-01www.spiegel.de

ECB President Mario Draghi hinted at such purchases last week, but the new element would be that the ESM could place the purchased bonds with the ECB as collateral and obtain fresh money from the central bank with which to support ailing euro states. Supporters of the idea hope that the award of such a banking license to the ESM in itself would calm financial markets.

...

The plan isn't new. France proposed it last year but Germany and other countries shot it down. But German Chancellor Angela Merkel faces increasing European pressure to drop her Nein and make way for a measure that many hope would end the two-year crisis plaguing the continent.

The German Finance Ministry on Tuesday rejected the plan. A spokesman said the ministry saw no need for an ESM banking license. "And we're not holding talks on this issue."

Also see this article. To wit:

Lawmakers from all three parties in Merkel's coalition immediately repudiated the suggestion. It is a "dangerous attempt" to bypass the ban on the central bank financing states directly, said Hans Michelbach of the Bavarian Christian Social Union. The Free Democratic Party's Rainer Bruederle told Die Welt newspaper such a mechanism is a "wealth-destroying weapon," while Norbert Barthle of Merkel's Christian Democratic Union said it won't happen.



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