BERLIN (MNI) – Monetary policy in the Eurozone needs to return to
normality, new ECB Governing Council member Jens Weidmann said Monday in
a text of his inaugural speech as president of Germany’s Bundesbank.
The conceivable challenges in monetary policy are obvious, Weidmann
said. “Precisely, it is about designing the return to monetary policy
normality,” he argued. “Thus, as regards the exit [from accommodative
policies] there does not arise the question of ‘if’ but only of’when’.”
“Short-term crisis measures can — if they become a permanent
medication — have substantial side effects,” Weidmann warned.
The incoming Bundesbank chief asserted that the monetary policy
strategy of the ECB had proven itself in the global economic and
financial crisis. “I thus see no reason for a fundamental
reorientation,” he said.
Weidmann announced that he would represent the clear
stability-oriented course of the Bundesbank in European institutions.
Fiscal reform efforts in the European Union go in the right
direction but are not sufficient, Weidmann argued. National fiscal
policies and private investors as a matter of principle have to be
liable for the consequences of their own decisions, he said.
“The shifting of financial burdens to third parties must not appear
to be an attractive path,” he urged.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
[TOPICS: MT$$$$,M$X$$$,M$G$$$,M$$EC$,MGX$$$,MFX$$$]
