BERLIN (MNI) – German Chancellor Angela Merkel on Thursday again
praised the conditionality of the European Central Bank’s bond-buying
plan.
“I absolutely back [ECB President] Mario Draghi that the homework
has to be done in the states,” Merkel said in a speech at a business
conference here. “The ECB cannot substitute for political action.”
The chancellor said that yields on German government bonds were
currently too low, while those of some other Eurozone member states were
too high. “We need to come back to more normal levels again,” she said.
“The measures decided by the ECB have to be seen against this backdrop.”
Merkel reiterated that the debt crisis cannot be overcome with one
big bang, but rather that several steps will be needed.
The outlook for the German economy has become more uncertain “and
not so optimistic anymore,” she acknowledged, stressing the need
strengthen domestic demand now.
In that regard, it is crucial not to undertake too much budget
consolidation in Germany in order not to intensify a recessionary trend
in Europe, Merkel reasoned.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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