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Bundesbank Not Isolated on ECB Council: President

Bundesbank President Jens Weidmann told CNBC on Tuesday he did not feel isolated on the governing council of the European Central Bank, downplaying concerns over disagreement within the council over the measures the bank has taken to abate the crisis in the euro zone.

European Central Bank
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European Central Bank

Weidmann voiced his concerns in a letter to ECB President Mario Draghi last month.

The letter, which was leaked, prompted questions at the ECB’s press conference last week about a rift between the two.

Draghi said at the press conference that his personal relationship with the Bundesbank chief was excellent and that the German central bank was not isolated.

“Of course we do have to have internal debates about our monetary policy and that letter – which was a confidential letter to Mario Draghi – was to contribute to that debate. And I think if we hadn’t a debate about our monetary policy measures, you would have reasons to worry about,” he said. “In that sense I don’t think there is an isolation of the Bundesbank.”

According to Weidmann, the Bundesbank doesn’t differ that much in its assessment of risks.

Weidmann said that the role the ECB had taken on in recent months – including the two three-year funding operations which pumped cash into the banking system - fell outside the bank’s traditional mandate.

“This is not the traditional role of a central bank. We also have to see that with our measures we can only do one thing. This is buying time for those policy makers who are responsible to solve the crisis to act,” he said.

“If this time is not used, monetary policy is pushed in a very dangerous situation,” he said.

Weidmann declined to comment on further measures the ECB may take to help ease the euro zone crisis.

“I’m not speculating about future measures of the ECB. I’m just saying that we have to discuss all the effects of our policy and I think this is something that is widely shared by all my colleagues.”