German Media Hit Back at ECB on Bond Buying
After Thurday’sannouncement by the president of the European Central Bank, Mario Draghi, in which he detailed the central bank’s pledge to buy government bonds of struggling euro zone countries, newspapers in Germany have hit out at the plan with surprisingly few exceptions.
Newspaper, Die Welt ran with the headline: “Financial markets cheer the death of the Bundesbank”, saying that President Draghi had broken the bold principles of German monetary policy.
“The central bank is pumping unlimited money in the bond markets. Stock markets cheer. For Germany — the nightmare begins,” the newspaper said.
Newspapers across the political spectrum picked out the words “unlimited” or “without limits”, with respect to the bond-buying scheme, as being the phrase that the German public were fearing the most. The Tageszeitiung, Bild and the Frankfurter Allgemeine all emphasized this point in their publications.
The ECB said on Thursday that it will carry out open-ended purchases of short-maturity government bonds to keep borrowing costs down for Spain, Italy and other struggling countries.
The actions of the ECB in the past haven’t been without skepticism from some in Germany, with the country’s taxpayers effectively funding the previous bailouts given to Greece.
Leading the way has been the president of the Bundesbank, Jens Weidmann, who took the time to release a statement on Thursday after the ECB’s press conference.
He described the bond-buying program as being “tantamount to financing governments by printing banknotes".
Another newspaper, the Süddeutsche, agreed with Weidmann. In a comment piece by Marc Beise it said that Germany should be thankful of Weidmann for not letting the ECB open the floodgates wider.
The country’s most popular newspaper, Bild, had the headline "Blanko-Scheck für Schulden-Staaten", which translates as: “A blank cheque for the debtor states”.
The paper then asks a series of questions on whether the scheme will break the euro and whether inflation will eventually take hold despite the best efforts of the central bank.
It also added: "Who bears the financial risk? The German share of the burden is 27 percent".