FRANKFURT (MNI) – The following is a statement issued by the
Bundesbank on Thursday:
“In the most recent discussions, as before, Bundesbank President
Jens Weidmann reiterated his frequently substantiated critical stance
towards the purchase of government bonds by the Eurosystem.
He regards such purchases as being tantamount to financing
governments by printing banknotes. Monetary policy risks being
subjugated to fiscal policy. The intervention purchases must not be
permitted to jeopardise the capability of monetary policy to safeguard
price stability in the euro area.
If the adopted bond-purchasing programme leads to member states
postponing the necessary reforms, this will further undermine confidence
in the political leaders’ crisis-resolution capability. This underscores
the crucial importance of ensuring both credibility in the promised
conditionality and the resolute determination to immediately terminate
intervention purchases if the underlying conditionality is no longer
assured.
The announced interventions in the government bond market carry the
additional danger that the central bank may ultimately redistribute
considerable risks among various countries’ taxpayers. Such
risk-sharing, however, can be legitimately authorised solely by
democratically elected parliaments and governments.”
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