Deputy Chancellor Supports Bundesbank

German economy minister supports Weidmann in bond buy opposition | Reuters.

Philipp Roesler is the head of the Free Democratic Party, vice chancellor and economics minister in the German government. He supports the Bundesbank in its opposition to the ECB  bond buying plan. He said,

Bond purchases cannot remain a permanent solution as they drive the danger of inflation.

From their lessons in school, Germans know that bond buying by the Reichsbank in the 1920’s led to hyperinflation and Hitler’s rise to power. These facts are ingrained in them just like Americans are taught that taxation without representation led to the Revolutionary War.

The Bundesbank was the guardian of the German Mark from the end of World War II to the adoption of the euro, and German citizens hold this institution in very high regard. By openly supporting Jan Weidmann, Roesler is playing to this sentiment. He is also setting himself up to take a crack at leading the German government if the ECB’s actions hurt the German voter.

https://dareconomics.wordpress.com/2012/08/27/merkel-is-setting-the-table-for-another-greek-bailout/

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One thought on “Deputy Chancellor Supports Bundesbank

  1. The politically smart, safe thing to do this is. Germany is not going to leave the EMU if the ECB exploits some loophole allowing it to buy short-dated sovereign paper in order to keep hopelessly insolvent Spain afloat. So, why not play into the German citizenry’s sentiment on this matter, particularly when the ECB’s actions might not have an immediate effect of devaluing the euro to any degree negatively impacting the German economy more so than is already occurring via the austerity/bailout regime.

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