–Merkel: Have Faith That ECB Will Operate Within Its Mandate

FRANKFURT (MNI) – German Chancellor Angela Merkel on Sunday urged
politicians in her own country to choose their words carefully when it
comes to Greece and withhold judgement until the Troika report on Greece
is released in September.

“We are at the moment in a very decisive phase in battling the
Eurozone debt crisis, and that is why I think we should all be weighing
our words carefully,” Merkel said in an interview with Germany’s ARD
television.

Her comments came after Alexander Dobring, general secretary of the
CSU, the sister-party of Merkel’s CDU, said he expected Greece to leave
the Eurozone in 2013, according to a weekend interview with the weekly
Bild am Sonntag.

Merkel also said she had confidence the ECB would stay within its
price stability mandate and offered cautious backing for ECB Governing
Council member Jens Weidmann.

Weidmann, in an interview with Germany’s Der Spiegel magazine
earlier Sunday, repeated his opposition to the ECB’s plan to consider
buying sovereign bonds of countries that seek aid from the ESM rescue
fund.

Merkel, who has said she supports ECB President Mario Draghi’s
bond-buying plan, said the central bank has “a very clear and narrow
mandate to contribute to price stability, and I continue to trust that
the ECB will make its decisions — and Mario Draghi has also said this
— on the basis of this mandate.”

Merkel said she found it “good that Jens Weidmann every now and
again issues political warnings.” It was “not unusual” for there to be
disagreements within the ECB Governing Council, any more than within the
European Council.

Central bank independence “means that I deal with the political
questions — and here we have our hands full — and of course that I
help strengthen the position of Jens Weidmann … so that his influence
also within the European Central Bank is enhanced,” Merkel said.

Merkel said she had “no indications” that the International
Monetary Fund was considering leaving the Greek aid program, and she
denied that doubts over Greece’s viability as a Eurozone member were
spreading within her own coalition government.

While Greece clearly still has more to do, Merkel highlighted the
effect of German politicians’ comments abroad, and “that is why we must
tread carefully, knowing what kind of changes are necessary in Greece at
the moment.”

Merkel repeated comments she made after a meeting with Greek Prime
Minister Antonis Samaras on Friday, saying Greece has a right to expect
that Germany will “wait for this (Troika) report and then make our
judgement.”

Merkel also denied a report from Spiegel that her government was
pushing for a new European Convention, as early as December, to consider
more drastic changes to the EU’s treaties. Merkel said such discussion
died when Britain declined to go along with the EU’s Fiscal Compact.

“I’m not calling for a convention. I am calling — and have been
for a while — for us not to stop moving forward on the steps we have
taken,” Merkel said, adding that these next steps would be discussed
over the autumn months.

— Frankfurt bureau: +49-69-720 142; email: ccermak@mni-news.com —

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