ECB money-printing shouldn't become
'unbound', says Weidmann
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[June 22, 2020]
FRANKFURT (Reuters) - The European
Central Bank's massive buying of government bonds shouldn't become a
form of "unbound", permanent help to indebted governments, ECB
policymaker Jens Weidmann said on Monday. |
![](../images/062220pics/busine43.jpg)
German Bundesbank President Jens Weidmann attends the 29th Frankfurt
European Banking Congress (EBC) at the Old Opera house in Frankfurt,
Germany November 22, 2019. REUTERS/Ralph Orlowski |
The
head of the Bundesbank defended the ECB's "flexible" purchases,
which have been focussed on debt from struggling Italy, but said
these should only be temporary.
"'Flexible' should not mean 'unbound'," Weidmann said in a
recorded message. "Again, it is important to me that monetary
policy does not set the wrong incentives for public finances."
He warned the ECB's ultra-easy policy will need to be tightened
when the economic outlook allows to prevent the central bank
from becoming "entangled with politics" and overburdened.
"Policymakers must not assume that we would keep the financing
costs of governments low forever or iron out any differences in
sovereign risk premia," Weidmann added.
(Reporting By Francesco Canepa; Editing by Balazs Koranyi)
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