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FRANKFURT, Nov 26, 2011 (Dow Jones Commodities News via Comtex) -- Politicians are endangering the European Central Bank's independence by openly discussing an expansion of its mandate, ECB Executive Board member Juergen Stark said in an interview to be published Sunday.
"The political pressure on the ECB is currently enormous," with "an expansion of our mandate openly discussed," Stark told German newspaper Frankfurter Allgemeine Sonntagszeitung.
"That doesn't just touch our independence; it endangers it," he said.
The ECB's mandate is to maintain euro-zone inflation at just below 2%. But politicians from a number of member states are increasingly urging the bank to print money and greatly expand its government bond purchases in an effort to end the bloc's debt crisis.
ECB executives so far have resisted such demands. They have been supported by Germany, which traditionally has expected its central bank to focus on fighting inflation.
Stark warned that neither monetary financing nor the creation of common euro-zone bonds would solve the debt crisis.
Euro bonds "don't at all solve the structural budgetary problems that some euro-zone member states face," he said. "Rather, they lead to a liability and debt union that nobody can want."
Meanwhile, "the central bank's printing press will on no account be used to reduce government debt," he said, reiterating the ECB's line on monetary financing.
Stark also warned that inflation might rise again, the newspaper reports.
Stark in September said he will leave the ECB, in what sources told Dow Jones Newswires was a protest at the central bank's decision to reactivate its dormant government-bond purchase program. He is due to leave the central bank at the end of December.
His successor on the ECB's Executive Board, German Deputy Finance Minister Joerg Asmussen, also opposes large-scale purchases of government bonds by the ECB, according to an interview to be published in FASZ Sunday.
"If government bonds are bought unconditionally and in large amounts by a European authority and taken from the market, that would reduce the pressure on indebted states to reform," he said.
-By Tom Fairless, Dow Jones Newswires, tom.fairless@dowjones.com; +49 69 29725505 begin_of_the_skype_highlighting +49 69 29725505 end_of_the_skype_highlighting
(END) Dow Jones Newswires
"The political pressure on the ECB is currently enormous," with "an expansion of our mandate openly discussed," Stark told German newspaper Frankfurter Allgemeine Sonntagszeitung.
"That doesn't just touch our independence; it endangers it," he said.
The ECB's mandate is to maintain euro-zone inflation at just below 2%. But politicians from a number of member states are increasingly urging the bank to print money and greatly expand its government bond purchases in an effort to end the bloc's debt crisis.
ECB executives so far have resisted such demands. They have been supported by Germany, which traditionally has expected its central bank to focus on fighting inflation.
Stark warned that neither monetary financing nor the creation of common euro-zone bonds would solve the debt crisis.
Euro bonds "don't at all solve the structural budgetary problems that some euro-zone member states face," he said. "Rather, they lead to a liability and debt union that nobody can want."
Meanwhile, "the central bank's printing press will on no account be used to reduce government debt," he said, reiterating the ECB's line on monetary financing.
Stark also warned that inflation might rise again, the newspaper reports.
Stark in September said he will leave the ECB, in what sources told Dow Jones Newswires was a protest at the central bank's decision to reactivate its dormant government-bond purchase program. He is due to leave the central bank at the end of December.
His successor on the ECB's Executive Board, German Deputy Finance Minister Joerg Asmussen, also opposes large-scale purchases of government bonds by the ECB, according to an interview to be published in FASZ Sunday.
"If government bonds are bought unconditionally and in large amounts by a European authority and taken from the market, that would reduce the pressure on indebted states to reform," he said.
-By Tom Fairless, Dow Jones Newswires, tom.fairless@dowjones.com; +49 69 29725505 begin_of_the_skype_highlighting +49 69 29725505 end_of_the_skype_highlighting
(END) Dow Jones Newswires
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