BERLIN (Reuters) - The European Central Bank’s plans to buy the debt of troubled euro zone states calls its independence into question and takes it to the limits of its mandate, a senior member of Chancellor Angela Merkel’s ruling conservatives said on Monday.
The plans for potentially unlimited purchases of bonds issued by countries that request a European bailout and fulfil strict domestic policy conditions has stirred anxiety in Germany over the growing costs of the nearly three-year-old debt crisis.
The German central bank chief, Jens Weidmann, opposed the ECB move and some conservatives share his view that the bond-buying plans violate a taboo on financing state deficits. They also fear it will erode the ECB’s independence from politicians.
“Because an ECB intervention (in the bond markets) hinges on politically determined programs, the bank’s independence is brought a little bit into question,” Volker Kauder, the conservatives’ parliamentary leader and a close ally of Merkel, told the Bild daily.
“The ECB has reached the border of what is permitted, also because it is moving into the area of state financing. These are quite simply extraordinary times,” he added.
Echoing Merkel, Kauder stressed that ECB help for troubled states would be strictly conditional on them adopting tough austerity measures to put their public finances in order.
“Every ECB intervention carries risks. But if nothing were done things would not be better. On the contrary. A failure of the euro would be incalculably more costly,” he told Bild, which has long criticized bailouts of struggling states like Greece.
Germany’s Constitutional Court will determine the fate of the euro zone in a long-awaited ruling on Wednesday that is expected to give a green light to the region’s permanent new bailout fund, the European Stability Mechanism (ESM).
Kauder said he hoped for a positive verdict, describing the ESM as ”the central building block“ for overcoming the crisis”.
At the weekend, Peter Gauweiler - a lawmaker from the Christian Social Union (CSU), Bavarian sister party of Merkel’s Christian Democrats - lodged a complaint with the Constitutional Court over the ECB’s bond-buying plans.
Reporting by Gareth Jones; Editing by Noah Barkin