German Chancellor Angela Merkel said unprecedented policy decisions taken by the European Central Bank underline the need for “resolute” action in troubled countries, as support for the ECB among some members of her party wears thin.
After a meeting with the bank’s president, Mario Draghi, at the Chancellery today, Merkel said a package of measures taken by the ECB on June 5 suggests that the euro-region’s five year-old crisis isn’t over and raises pressure on leaders to boost growth and help job creation.
“We also talked today about the political contribution, which must be to continue resolutely on the path of reform,” Merkel said at joint news conference with Serbian Prime Minister Aleksandar Vucic, which followed the meeting with Draghi. European Union leaders must discuss “which tasks we see ahead in the next five years and what we have to concentrate on to improve competitiveness.”
The ECB’s decision, which included record-low interest rates and a cut in the deposit rate to minus 0.1 percent, deepened a rift with some German economists and lawmakers, who say Draghi is pandering to weaker euro-region economies while expropriating German savers.
Ralph Brinkhaus, the finance spokesman in parliament for Merkel’s Christian Democrats, said it’s not Draghi’s responsibility to “undertake selective economic policy for certain parts of the euro area.” German Finance Minister Wolfgang Schaeuble said yesterday that the ECB, while having taken “appropriate” policy steps, can’t solve “the underlying problems of the financial debt crisis.”
EU leaders at a June 26-27 meeting in Brussels will discuss action to be taken at national level to boost economic growth, competitiveness and job-creation and endorse country-specific recommendations on structural reforms, employment policies and national budgets.