Citigroup chief economist Willem Buiter said the European Central Bank (ECB) plans to restart its bond-buying program ahead of  this week’s auction of Italian bonds, according to a Reuters report.

Italy will conduct an auction on Thursday that without support from ECB will fail, Buiter said in the report.

Last week the ECB made no purchases, marking the 20th time in 24 weeks the that the ECB has refrained from buying.   

According to market reports, however, the ECB  is said  to have already resumed its bond buying with the large purchase made yesterday of Italian and Greek bonds. Luxembourg finance Luc Frieden said the ECB didn't discuss bond purchases with ministers.  

The ECB started bond purchases last May with 17 other euro zone national central banks . These purchases were made  to stave off the sovereign debt crisis.

Under the program, the central banks buy government and corporate bonds from banks and other investors, but not directly from governments. 

The ECB published an announcement recently that said it would suspend the application of the minimum credit rating threshold in the collateral eligibility requirements for the purposes of the Eurosystem’s credit operations.

The suspension would apply to marketable debt instruments issued or guaranteed by the Portuguese government until further notice. The ECB also made a similar announcement regarding Greek bonds.

According to market reports, the ECB will base rating eligibility on  the best rating available for the sovereigns from Standard & Poor’s, Moody’s Investors Service and Fitch Ratings.  All three rating agencies would have to take action to take away access to ECB funds.

Buiter, a former Bank of England policy maker, said in the Reuters report that the ECB will likely look to get greater guarantees for the debt it buys and will seek to extract “a pound of flesh” from governments.

The bank will do this by using the purchases to demand they impose greater austerity and avoid steps that could spur credit rating companies to declare a nation is in selective default.

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