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ECB Pandemic Program Is Temporary Crisis Measure, Weidmann Says

  • Governments can’t assume ECB to be there for them forever
  • Important for pandemic program not to set wrong incentives

Bundesbank President Jens Weidmann warned governments not to rely on the European Central Bank to keep borrowing costs artificially low once the economic fallout from the pandemic is contained.

The German argued it’s important that the 1.35 trillion-euro ($1.5 trillion) Pandemic Emergency Purchase Program doesn’t set wrong incentives for public finances. When the inflation outlook requires a normalization of monetary policy, the ECB needs to do what is necessary to safeguard price stability, he added.