FRANKFURT (MNI) – The European Central Bank’s bond buys do not harm
its independence and are of a temporary nature, German Deputy Finance
Minister Joerg Asmussen said Monday in a European parliamentary hearing
aimed at clearing his nomination to join the European Central Bank’s
Executive Board.
ECB independence “is an absolute requirement,” Asmussen said. The
ECB’s Securities Markets Program is not impeding its independence, he
added, noting that the decision to buy bonds was motivated by a desire
to restore the monetary policy transmission mechanism.
Asmussen pushed for EFSF reforms that will empower the Eurozone
bailout fund EFSF to intervene in the primary and secondary government
bond market, allowing the central bank to exit the temporary market
interventions.
Asmussen stressed that “we need a clear separation between what is
the function and the mandate of monetary policy and what is the function
of fiscal policy.”
“Price stability — this is what the ECB can contribute,” Asmussen
said. Looking at the inflation environment, he said, headline inflation
is currently above the price stability target and may stay there for
some months before easing over the medium term. “One can say that the
inflation risks in the Eurozone are balanced,” he said.
— Frankfurt newsroom: +49-69-720142; email: frankfurt@marketnews.com
[TOPICS: MT$$$$,M$X$$$,M$$EC$]
