“It is clearly the responsibility of fiscal policy makers to decide on further help for Greece, as well as to provide the financing and assume the risks involved,” the Frankfurt-based Bundesbank said in its monthly bulletin published today. “This is not the responsibility of monetary policy.”
The Bundesbank also reiterated its opposition to the ECB’s new bond-purchase plan, saying it is important to maintain a strict separation between fiscal and monetary policy “to avoid the impression of monetary policy being co-opted by fiscal policy interests.”
“The Bundesbank still remains critical of Eurosystem government-bond purchases and the stability risks these may entail, in particular if they are used to resolve government financial difficulties through monetary policy,” it said.
The central bank said the German economy may continue to weaken due to the uncertainty caused by Europe’s sovereign debt crisis.
“The economy is currently influenced by a streaky overall picture that is likely to continue to darken by the end of the year,” it said. “The uncertainties stemming from the sovereign-debt crisis are as much a concern as the mixed economic signals from other regions of the world.”
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