ECB’s Nowotny Sees Skepticism ESM Will Act Quickly When Needed

European Central Bank Governing Council member Ewald Nowotny said he sees skepticism about how quickly funds from the European Stability Mechanism can be deployed when needed because of cumbersome decision-making.

Borrowing costs for euro-area governments have dropped in recent weeks based on the assumption that the ESM, the euro-area’s bailout fund, will function as advertised, Nowotny said in an interview with Austrian state television broadcaster ORF today. It may be useful to test the ESM’s ability to act quickly in practice, he said.