FRANKFURT, Nov 9 (Reuters) - The European Central Bank would need to act if it found that governments were taking advantage of the ultra-low borrowing costs it helped create to avoid tapping the European Union's 750 billion Recovery Fund, ECB board member Yves Mersch said on Monday.
Concerns are growing that some countries will not take EU loans, which come with some conditions, as they can easily borrow on the markets at super-low rates thanks to the ECB's copious bond purchases.
"In some countries, we'll maybe not see a pick up of the European possibilities but (they would) rather rely on national debt issuance that would then be bought up by the European Central Bank," Mersch said in a discussion about the Recovery Fund.
"In my opinion this would obviously need a reaction by the European Central Bank, which can not be used to circumvent measures that have been put into place at the European level," Mersch said. "We can not give a guarantee for accommodating such obvious circumvention."
He added: "I encourage all member states not to undermine this new European solidarity approach by reneging on what was so difficult to achieve."
The ECB has set aside 1.35 trillion euros for emergency bond buys, which has lowered borrowing costs to pre-crisis levels.
Mersch added this was "part of an ongoing discussion" and there had not been any official "refusal" to take EU credit.
(Reporting by Balazs Koranyi Editing by Francesco Canepa)
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