World Bulletin / News Desk
Euro zone governments and the European Central Bank are preparing to intervene on financial markets to help bring down Spanish and Italian borrowing costs, French afternoon daily Le Monde reported on Friday.
The newspaper, which cited unnamed sources, said the ECB was willing to take part in the action on condition that governments agreed to tap the bloc's bailout funds, the European Financial Stability Facility and the European Stability Mechanism.
Under the plan, the EFSF could be activated first to purchase Spanish and Italian debt on the primary market, followed by the ESM in September, after it becomes operational.
The ECB would at the same time buy Spanish and Italian government bonds itself on the secondary market.
The newspaper said the plan was days or possibly weeks away from being finalised and that officials were holding consultations on Friday about it.
A source close to French President Francois Hollande said that he planned to speak to German Chancellor Angela Merkel at around 1100 GMT about implementing decisions taken at a June EUsummit that proposed new measures for tackling the debt crisis.
ECB President Mario Draghi pledged on Thursday to do whatever was necessary to preserve the euro, sending a strong signal that it might take action on Spanish and Italian borrowing costs.
However, regional markets struggled as profit-takers moved in after a healthy week and traders were spooked by reports the man probing Donald Trump's links to Russia will also investigate his business dealings.
In initial deals in the eurozone, Frankfurt's DAX 30 slipped 0.2 percent to 12,424.80 points and the CAC 40 in Paris also slipped 0.2 percent to 5,188.92 points compared with the closing levels on Thursday.
The greenback had soared along with global markets for months after Trump's November election victory on hopes his big-spending, tax-cutting policies would fire up the world's top economy and fan inflation.
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