German backlash to the ECB print-to-finance plan has begun. The Bundesbank, a hallowed institution in Germany, is opposed to the plan. Politicians must heed the Bundesbank in matters of monetary policy due to the German experience with hyperinflation in the 1920’s.
So, Joerg Asmussen, the German representative to the ECB, was defending the print-to-finance plan based on its conditionality and claims that financing governments falls under monetary policy. Finance Minister Schaeuble is using the same talking points as Asmussen.
Merkel is playing both sides of the fence. She supports the ECB’s print-to-finance plan, but she also supports Bundesbank President Jan Weidmann even though he is diametrically opposed to the plan.
The German media is catching on to these misrepresentations. The headlines tell the whole story, “Help Without end for Crisis Countries,” “Draghi Issues Blank Check,” “ECB Beyond Mandate,” and my favorite, “The Rise, Fall and Resurrections of the Bundesbank.”
German voters do not wish to keep paying for the profligacy of these countries, particularly after raising their own retirement ages and cutting back on their own welfare state several years ago.
There is an election coming up. If the German voters realize how much of their money has been squandered in supporting the doomed euro, it should be a very interesting campaign season in Deutschland.