European Central Bank president Mario Draghi says there is "no external saviour" for heavily indebted governments in the euro zone debt crisis and gave no sign the bank is ready to step in and support their finances.
Draghi said governments must take the tough steps to balance budgets and reform economies to promote growth. "I will never tire of saying that the first response should be from government," Draghi said today at a speech in Berlin.
"There is no external saviour for a country that doesn't want to save itself," he added.
As a "firewall" to calm markets in the meantime, the EU has its newly strengthened bail-out fund, he said. Some economists have urged the ECB to support governments with bigger purchases of government bonds.
So far the bank has made some purchases but kept them limited and said the programme is temporary, stressing that governments must not rely on such help from the ECB. Draghi said that the purchases were "neither eternal nor infinite."
In his speech, Draghi focused instead on the European Financial Stability Facility, the current EU bail-out fund, as the "firewall" against the crisis. He urged EU officials to quickly implement decisions to strengthen it to assure markets governments will pay their debts on time.
Governments have agreed on ways to increase the fund's lending power and are seeking outside investors such as countries in emerging markets to contribute to its lending power, so far without much progress.
Economists say the EFSF is too small to bail out Italy, the most recent focus of the debt crisis that has seen Greece, Ireland and Portugal seek bail-outs from other euro zone governments and the International Monetary Fund.
Meanwhile, EU Council president Herman Van Rompuy has said the next EU summit will be held "end January-early February". He was speaking at the end of an EU-Russia summit.
The next summit is expected to finalise a pact to tighten budgetary discipline and move towards economic union agreed at a summit last week. The fiscal pact will concern the 17 nations sharing the euro in a first instance but was agreed in principle by 26 of the 27 EU nation, with Britain odd man out.
EU legal experts are currently working on how to transcribe the pact into law.
Euro slightly higher after Spanish auction
European shares and the euro rose today but the euro zone debt crisis weighed heavily on sentiment, though a successful outcome for a crucial bond issue in Spain helped sentiment.
The euro moved up to stand at $1.3019 this evening from $1.2970 in New York last night, when it had struck an 11-month low point.
But stocks in Asia fell for a third session in a row today on growing doubts over last week's European debt deal as Germany warned the crisis would last for years and again showed reticence about increasing euro zone rescue funds.
