Berlin: ECB acting within mandate with bond-buying action
(BERLIN) - German Chancellor Angela Merkel believes the European Central Bank is acting within its mandate in relaunching its programme to buy sovereign bonds of strugging eurozone members, her spokesman said Friday.
"The ECB is acting independently and within its mandate," Steffen Seibert told a regular government news briefing, a day after ECB chief Mario Draghi announced the plan to drive down borrowing costs.
Merkel already gave a muted reaction to the Frankfurt-based central bank's action for dousing the eurozone crisis after her talks Thursday in Madrid with Spanish Prime Minister Mariano Rajoy.
"The ECB acts within its independence and within its mandate and is responsible for the stability of the currency, the value of the currency, and to take the appropriate decisions," she said.
But many commentators in Germany as well as the head of the German central bank or Bundesbank argue the plan blurs the lines between monetary policy, which is supposed to be free from all political influence in the euro area, and fiscal policy.
Bundesbank chief Jens Weidmann kept up his criticism after Thursday's highly-anticipated announcement by the ECB, saying he "regards such purchases as being tantamount to financing governments by printing banknotes".
Draghi's masterplan is designed to bring down the soaring borrowing costs that crisis-wracked countries say prevent them from getting back on their feet.
European equities and the euro rose Friday, extending the previous day's rally after the ECB's announcement.
Text and Picture Copyright 2012 AFP. All other Copyright 2012 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.