Spain Keeps Debt Crisis Alive

ECB President Draghi quashes talk of early exit from stimulus measures.

European Central Bank President Mario Draghi quashed talk of an early exit from emergency stimulus measures as Spain struggled to borrow in financial markets, a reminder of the risk that the region’s debt crisis could flare again.

Speaking just hours after Spanish Prime Minister Mariano Rajoy warned his country faces “extreme difficulty,” Draghi said talk of the ECB starting to withdraw its support for euro-area banks is “premature.” At the same time, in a nod to growing inflation concerns in Germany, Draghi said the ECB won’t hesitate to counter upside price risks if needed. Policy makers left their benchmark rate at a record low of 1 percent today.

Exit Pressure

Draghi faces pressure from some ECB policy makers to start planning an exit as higher energy costs keep euro-area inflation above the central bank’s 2 percent limit and price pressures brew in Germany.

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