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ECB weighing two-pronged bond-buy plan: report

FRANKFURT (MarketWatch) -- The European Central Bank is planning to undertake coordinated action with the European Stability Mechanism, the euro-zone's permanent rescue fund, to buy Spanish and Italian government bonds, German daily Sueddeutsche Zeitung reported Thursday, citing unnamed sources. A final decision, however, wouldn't come until September when Germany's Constitutional Court is scheduled to rule on challenges to German participation in the fund, the report said. Under the plan, the ESM would buy bonds in the primary market, while the ECB would act in the secondary market, the report said. News reports late last week said ECB President Draghi was pursuing such a two-pronged strategy. The ECB is expected to leave interest rates unchanged when it announces the outcome of its policy meeting later Thursday. ECB President Mario Draghi will hold his monthly news conference at 2:30 p.m. local time, or 8:30 a.m. Eastern.