BERLIN (Reuters) – Recent and strong criticism of the monetary policy of the European Central Bank could be because some measures have blurred the boundaries between monetary and fiscal policy said the member of the governing council of the ECB, Jens Weidmann, in an interview with several European newspapers.
the head of the Bundesbank (German central bank) said the governing council agreed that a policy was necessary expansionary monetary in the current environment and that he and the president of the ECB, Mario Draghi, agreed on the importance of price stability.
But in an interview published Tuesday by daily Die Welt as German or Spanish El Pais, he said he had some basis in the last few reviews.
“Perhaps the vehemence of the debate also be because some measures have blurred the boundaries between monetary and fiscal policy and redistributed state responsibility on bank balance sheets,” said the German, adding that this had become more vulnerable to attacks ECB.
German politicians have complained publicly in recent weeks of the policy of low interest rates the ECB. The German Finance Minister Wolfgang Schaeuble told the Wall Street Journal that this policy is partly responsible for the rise of far-right party Alternative for Germany.
On Tuesday, Schaeuble said central banks should find ways to gradually raise interest rates at historic lows.
in the interview published by El País, Weidmann said the ECB’s independence and said the agency “can not make decisions for their political sympathies.
on his relationship with ECB President Mario Draghi, Weidmann said: “sometimes we can come to different conclusions about difficult issues, but in regard to the importance of price stability and economic conditions, we are agree “.
Weidmann said the ECB council had to be careful not to exceed the border of fiscal policy and therefore the last repurchase program government bonds provided a cast of very limited responsibilities.
But he added: “However, I still think that purchases of government bonds in the euro zone are problematic because central banks become the largest creditors of its states”
Asked how far I could get the ECB with negative interest rates, Weidmann said. “we have to let it take effect what we have decided and not to speculate on other measures”
Weidmann said the low interest rates were to weigh the benefits of banks but that was not the objective of monetary policy to ensure that a bank were to achieve a suitable profit, but added that a weak profits in banking could cause risks to financial stability which in turn harm the effectiveness of monetary policy and therefore of price stability.
“So we can not ignore,” he said.
He also noted that while low interest rates affected the savings of citizens, themselves helped them as employees, taxpayers and homeowners. He said the environment of low interest rates would cause some people ahorrasen consumiesen less and more, while others would take more risks in search of higher returns, and others continue saving more for retirement.
“In general, so far we are only seeing limited in our data for Germany reactions,” he said.
Weidmann said that the period of low interest rates extremely should not last longer than absolutely necessary.
He also said he did not approve discuss extreme measures such as the “helicopter money” or massive injection of money among citizens to stimulate spending and inflation, and added that he was not at the table ECB council.
Asked about the budget commitments in the euro countries, Weidmann said he agreed with Schaeuble on the desirability of creating an institution that objectively valorase compliance with the rules.
“that would free the (European) Commission desligaría economic analysis and policy decisions. ”
As for Greece, he said discussions on a debt relief were secondary because they meet the payments was not the most pressing problem in Athens, but rather stick to your program and restore its economy New.
On Spain, Weidmann told El Pais, facing the next general election, expected to be formed “as soon as possible an operational and responsible government”
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