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18:28, 26 April 2018 Thursday
11:53, 07 September 2012 Friday

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German media warns unlimited ECB aid could ruin euro
German media warns unlimited ECB aid could ruin euro

Germany's newspapers accused ECB chief Mario Draghi of writing a "blank cheque" to troubled euro zone states.

World Bulletin / News Desk 

Germany's conservative newspapers on Friday accused ECB chief Mario Draghi of writing a "blank cheque" to troubled euro zone states that could put the entire currency at risk, with top-selling Bild warning his policies could make the euro "kaputt".

The Italian president of the European Central Bank unveiled a new plan on Thursday to lower the borrowing costs of euro zone states like Spain and Italy by buying their bonds.

Germany's central bank opposes the ECB's move. Chancellor Angela Merkel has supported Draghi while insisting Bundesbank chief Jens Weidmann's public criticism of the bond-buying has been useful too.

For the country's conservative newspapers, many of which have taken an increasingly euro-sceptic stance as the three-year-old euro zone debt crisis wears on, Draghi's latest measures went too far.

"Help without end for crisis countries," said Bild on its front cover, adding that Draghi had signed a "blank cheque" and that his policy endangered the independence of the ECB. It cited German politicians saying the ECB had gone beyond its mandate of safeguarding the stability of the currency.

"Draghi sets off Germany's alarm bell," was the headline in the conservative daily Die Welt.

Business daily Handelsblatt, which often voices concern at the financial burden of the bailouts on German taxpayers and business, had a cover story on "the Rise, Fall and Resurrection of the Bundesbank" and gave prominence to Weidmann's warnings.

Inside, Handelsblatt criticised "the democratic deficit of the euro rescuers" - and linked the ECB's chosen path to next week's ruling by Germany's Constitutional Court on the legality of the euro zone's new bailout mechanism and budget rules.

The Frankfurter Allgemeine Zeitung, a sounding board for Germany's monetary hawks, wrote that "the border between monetary and fiscal policy has been blurred" and called the argument that bond-buying was within the ECB's mandate "far-fetched".

Finance Minister Wolfgang Schaeuble, attending an awards ceremony for Draghi late on Thursday, reiterated the government line that using monetary policy to solve the euro zone's fiscal problems could not be a permanent solution.

But senior Merkel MPs like her deputy floor leader Michael Fuchs insisted the ECB was acting within its mandate, telling Reuters: "As long as there is conditionality, it is okay."

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