Monday, 21 November 2011

Draghi insists on independence of the ECB

Draghi insists on independence of the ECB
Friday, 18.11.2011, 17:03
Mario Draghi, head of the European Central Bank
In the debt crisis, more and more voices calling for help from the
European Central Bank. ECB chief Draghi has now rejected his critics
in their place - and gets support from Federal Reserve Chairman

The President of the European Central Bank (ECB), Mario Draghi, has
defended the independence of his institution. The ECB lose their
credibility if they - as required in many cases - engaging with more
money in the financial markets, Draghi said on Friday in Frankfurt am
Main. Also, Bundesbank President Jens Weidmann cautioned against an
overly strong collection of the ECB.

The credibility of the ECB is justified in the success of its monetary
policy with which they curb inflation, Draghi said at the conference
Euro Finance Week. That is the contribution that could make the
monetary authorities to support the growth, create employment and
financial stability. "And we make this contribution in complete
independence," said Draghi

Shopping spree
Nevertheless, the ECB has purchased since May 2010 for almost € 200
billion government bond ailing euro-zone countries. These acquisitions
are in the euro-zone is very controversial, because the central bank,
according to many experts that exceed their expertise and money
associated with fiscal policy.

According to one newspaper report, the ECB but a secret weekly cap on
their bond purchases. The very existence of this limit is secret, told
the "Frankfurter Allgemeine Zeitung" on Friday without citing sources.
Could there be feared that the knowledge about the border to encourage

But the skepticism was growing about the buying-in of Governors of the
Central Bank, in which the heads of 17 central banks in the euro
countries are represented, told the "Frankfurter Allgemeine Zeitung"
on. Therefore, the upper limit had been lowered last week to 20
billion €. At the meeting of Council on Thursday, the limit was
probably set down again. Bundesbank President and ECB Council Member
Weidmann wanted to not comment on Friday on request to the existence
of such a limit.

Warning from the Federal Reserve Chairman
Instead, he warned in the previous Congress, the Federal Reserve to
collect revenue for purposes of crisis management even further. The
lack of success in addressing the debt crisis does not justify it, to
irritate the mandate of the ECB, said Weidmann. "A clear commitment to
our mandate is an essential element for a successful future of the

To enter the monetary union in the future, a stable and consistent
framework, there are two practical ways: "The first would be a
reversal of the fundamental principles, with the responsibility of
individual Member States in fiscal and economic policy matters must be
taken seriously," said Weidmann. The second way is a "fundamental
change in the federal structures of the European Union" - a so-called
fiscal union in the coordinated monetary and fiscal policy closely
monitored and is European.

Federal Finance Minister Wolfgang Schäuble (CDU) said on Friday in
favor of closing the "gap" for the fiscal union. Within "24 months",
the EU can modify their contracts accordingly prognostizte Schäuble.

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