ECB discussions on bond buying far advanced, says Coeure

[January 13, 2015]  FRANKFURT (Reuters) - The European Central Bank is far advanced in discussions about whether to embark on a sovereign bond-buying program and could take a decision at its Jan. 22 meeting on whether to go ahead, a top ECB policymaker said.

Benoit Coeure told German newspaper Die Welt that Greece's national election on Jan. 25 would not influence the bank's monetary policy path as it weighs up whether to begin printing money to buy sovereign bonds - so-called quantitative easing (QE).

"The discussion is far advanced," said Coeure, who sits on the six-member Executive Board that forms the nucleus of the ECB's policymaking Governing Council. "Last week, we discussed a lot of technical details."

"We are in any case ready to take a decision on January 22. That doesn't necessarily have to mean we will actually decide," he added in the interview, published on Tuesday.
 

Asked how much the Greek election - just three days after the ECB policy meeting - would influence the bank's decision making, Coeure said: "An election there changes nothing on the path of monetary policy."

Greece's anti-bailout Syriza party is currently leading in opinion polls. It wants to cancel the austerity terms of the country's 240 billion euro ($284.16 billion) bailout and renegotiate its debt obligations, raising fears of a default and a potential exit from the euro.

Coeure said Greece had "a large interest to remain a member of the euro and to push on with the reforms."

Turning to prices, he said the ECB could not ignore the fact that inflation in the euro zone - running at -0.2 percent - was far below the bank's definition for price stability of just under 2 percent.

"The continually falling oil price strengthens the risk in the current environment that people lose trust in our inflation goal," he said.

($1 = 0.8446 euros)

(Reporting by Patricia Weiss; Writing by Paul Carrel; Editing by Kirsti Knolle and Susan Fenton)

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