Bundesbank President Jens Weidmann said the German central bank wants to ensure that the euro remains on a stable foundation.
“What we are doing is preserving the stability foundation of the single currency,” Weidmann said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “If the stability foundation of the euro is eroded, then we will also see the acceptance of the single currency eroded.”
The Bundesbank has faced criticism, including from billionaire George Soros, for speaking out against some European Central Bank crisis-fighting measures such as government bond purchases. Weidmann said Soros’s charge that the Bundesbank is preparing for the end of the euro is “ridiculous.”
“We shouldn’t get so excited about bond yields rising for a limited period of time,” Weidmann said. “They also constitute an incentive to reform, to embark on consolidation.”
The ECB, which has pumped more than 1 trillion euros ($1.3 trillion) into the banking system since December in a bid to avert a credit crunch, has “done its job,” Weidmann said. He added that governments must now press on with budget cuts and structural reforms to encourage economic growth.
“It’s important to get the message to governments, ‘this is your job now,’” Weidmann said.
The interview is scheduled to be broadcast at 2:35 p.m. Frankfurt time today.
To contact the editor responsible for this story: Craig Stirling at firstname.lastname@example.org