German central bank boss Jens Weidmann says Eurozone policy too loose
Hawkish Bundesbank boss Jens Weidmann weighed in on the Eurozone’s monetary policy this weekend, arguing that interest rates are too low for Germany.
Speaking at an open day at the country’s central bank, Weidmann said that the European Central Bank (ECB) rate policy is “too loose for Germany”, and warned again against keeping rates too low for an extended period of time.
“If we pursued our own monetary policy, which we don’t, it would look different,” he said, adding that the ECB must make policy which suits the currency union as a whole.
The intervention comes after ECB president Mario Draghi’s speech in London last week, in which the monetary policy chief argued strongly in favour of sticking to the existing fiscal rules.
Draghi’s comments were seen as an attack on Italian Prime Minister Matteo Renzi, who has advocated a more flexible budget system in which countries’ structural reform programmes are taken into account when deficit reduction targets are put in place.
Weidmann also expressed concern to domestic media outlets that low interest rates could make governments delay fiscal consolidation and structural reform. The German policymaker has previously warned against a quantitative easing programme for the Eurozone.