MNI: Dombrovskis: Italy Bond Buys A Question For Indepdnt ECB

-Says ECB QE Focused On Inflation Progress And Target

By David Thomas

     BRUSSELS (MNI) - European Commission Vice President Valdis Dombrovskis said

today it was up to the European Central Bank whether it remained appropriate to

continue to buy Italian sovereign bonds in light of the spread widening seen in

the wake of the new governing coalition's increased spending plans.

     Questioned on the ECB's continued asset purchase program as regards Italy,

Dombrovskis replied that the ECB's QE program had an inflation target at its

core. There was also a question of eligibility of Italian bonds, but that too

was a question for the ECB to determine.

     "The ECB's QE aim is to bring inflation close to its target of close to but

below 2%. It will be determined by its inflation's progress and that target,"

Dombrovskis added.

     Dombrovskis said that the spread widening "clearly reiterated the ...

importance of responsible fiscal policies. In this case, the prospect of not

following responsible fiscal policies already provoked some reaction," he added.

     In other remarks, the commissioner said that Greece was "broadly on track"

to conclude its current program in August and noted the country had met its

primary surplus targets last year and was on track to do so also in 2018. Greece

had also addressed EU recommendations for structural reforms, he said. The

comments come ahead of the Eurogroup's talks on the topic tonight in Brussels.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: M$E$$$,M$I$$$,M$X$$$,MC$$$$,MI$$$$,M$$FI$,MGX$$$]