Japan has joined China in committing to buy eurozone bonds from the region’s aid facility in order to help promote stability in the area by easing fears over a debt crisis contagion, according to Financial Times. On Tuesday, Yoshihiko Noda, Japan’s finance minister, said that the government would purchase over 20% of the bonds planned to be issued by the European Financial Stability Facility (EFSF) later this month. The upcoming EFSF issuance in expected to total €5 billion, which will be put towards the bailout of Ireland.
The support from Japan comes as European Central Bank’s former chief economist Otmar Issing warns that the poor response to the mounting sovereign debts in the eurozone could endanger the monetary union. In an essay published on Tuesday by the Official Monetary and Financial Institutions Forum, Issing pointed to the “unsound conduct of individual member countries” and discordant policies with the ECB as threatening the survival of the eurozone. Issing warned, “My conclusion at the start of 2011 is a somber one,” and added, “We have not yet reached the moment of truth.”
Click here to read the story on Japan’s commitment from Financial Times.
Click here for coverage of the ECB warning from Financial Times.