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10/24/12

ECB chief defends bond-scheme to German parliament - by Richard Carter

The head of the European Central Bank launched a fierce defence of his euro-crisis strategy on Wednesday, telling German deputies the bank's bond-buying plan was neither inflationary nor covert aid to governments.

Addressing the German lower house of parliament, Mario Draghi sought to ease the concerns of some of his harshest critics, stressing his plan was needed for the eurozone's hardest-hit nations to benefit from the ECB's low interest rates.

The OMT program, under which the ECB will buy unlimited amounts of the bonds of struggling countries to bring down their borrowing costs, "will not lead to inflation," Draghi stressed, according to a copy of his speech.

"In our assessment, the greater risk to price stability is currently falling prices in some euro area countries," he said.

Read more: AFP: ECB chief defends bond-scheme to German parliament

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