Bundesbank boss tells Hollande to leave EU fiscal pact alone

Bundesbank president Jens Weidmann warned French president-elect Francois Hollande on Saturday against tampering with the European Central Bank or the EU fiscal pact.

Speaking in an interview with the daily Sueddeutsche Zeitung, he also reminded Greece it would have to respect its commitments or risk having its bailout aid suspended.

"Any modification in the statutes (of the European Central Bank) would be dangerous," Weidman said when asked about Hollande's proposal during his electoral campaign to allow the ECB to take measures to support the economy or lend directly to states.

"Jobs and economic growth are the result of trade. The central bank is best placed to contribute to the stability of the (European) currency," he said.

With regard to Hollande's campaign pledge to renegotiate the European fiscal pact, he said "it is clear that must be refused."

"There is a European custom that you keep to accords you have signed," he said.

The conservative Weidmann's comments come ahead of Hollande's visit to Berlin on Tuesday, just hours after he is sworn in, for talks with Chancellor Angela Merkel.

Hollande said in his campaign that he would advocate measures to kickstart Europe's sluggish economies.

Weidmann said: "I know the new buzzword is 'growth'... all experience has shown that too much debt is a handicap to growth. To combat debt with more debt just will not work."

French Socialist politician Pierre Moscovici said he was confident Paris and Berlin could reach a compromise on how best to tackle the euro crisis.

"The Franco-German friendship, we are sure, transcends political differences," Moscovici told television channel BFMTV.

"It's important (Hollande and Merkel) meet, speak frankly and exchange ideas, then we can move forward."

On inflation, Weidmann stood firm: "It is a dangerous path, we must not repeat the errors of the 1970s. Inflation is socially unfair and will not get us out of the crisis."

It was the second day in a row Weidmann had quashed any idea, recently backed by Finance Minister Wolfgang Schaeuble, that Germany could live with a little more inflation in return for more domestic demand.

"If, on the advice of the ECB, we keep watch to make sure that average inflation doesn't rise above two percent, then inflation will not cross that threshold in Germany," Weidmann told Friday's Sueddeutsche Zeitung.

"Our citizens can have confidence in the vigilance of the Bundesbank," he added.

With regard to Greece, he said Saturday there was "no German economic diktat. But if Athens doesn't keep its word, it will be a democratic choice. The consequence will be that the basis for fresh aid will disappear."

And he shrugged his shoulders at the prospect of Greece reverting to the drachma, saying, "The consequences would be much worse (for Athens) than for the rest of the eurozone."

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Phl, US defense chiefs to meet on sea dispute
    Phl, US defense chiefs to meet on sea dispute

    As US aircraft carrier USS Ronald Regan began its journey to Asian waters amid China’s power flexing in the region, Defense Secretary Voltaire Gazmin would try to hear directly from his US counterpart how far America is willing to go to aid its long-time ally against China’s threatening moves in disputed waters. Gazmin flew to Hawaii last Monday to attend ceremonies for the turnover of leadership of the United States Pacific Command (USPACOM) from Admiral Samuel Locklear to Admiral Harry …

  • Water in Angat Dam falls below critical level
    Water in Angat Dam falls below critical level

    The water level of Angat Dam in Bulacan yesterday fell below the 180-meter critical level for irrigation, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) said. PAGASA said the dam’s water level further dropped to 179.98 meters as of 6 a.m. yesterday from 180.2 meters on Monday. The priority is the domestic consumption in Metro Manila, according to PAGASA. …

  • PCSO gets P3-B fund for medical aid
    PCSO gets P3-B fund for medical aid

    The Philippine Charity Sweepstakes Office (PCSO) reported yesterday that an estimated P3-billion charity fund has been allocated by Congress to the agency to provide medical assistance to indigent patients and also give funds to other government offices including the Philippine Drug Enforcement Agency (PDEA) and the Crop Insurance Program. …

  • Image of Asia: Tearing down squatters' homes near Manila
    Image of Asia: Tearing down squatters' homes near Manila

    In this photo by Bullit Marquez, a demolition crew begins to tear down a squatters' community at suburban Caloocan city, north of Manila, Philippines. Population growth and the lack of economic opportunities in rural areas have driven millions of Filipinos into the squatters' colonies that dot the sprawling metropolitan area in and around Manila. Most of the land they occupy is privately owned, and clearing the dwellings often results in violence. The landowner had offered about $1,344 in …

  • SE Asia Stocks - Mostly down; Thai shares near 2-week low

    BANGKOK, May 26 (Reuters) - Most sharemarkets in Southeast Asia fell on Tuesday with the Thai index ending at a near two-week low and the Philippines touching a near four-week low after trade data while ... …

  • China breaks ground on lighthouse project in South China Sea

    China hosted a groundbreaking ceremony for the building of two lighthouses in the disputed South China Sea, state media said on Tuesday, a move that is likely to escalate tensions in a region already jittery about Beijing's maritime ambitions. China's Ministry of Transport hosted the ceremony for the construction of two multi-functional lighthouses on Huayang Reef and Chigua Reef on the disputed Spratly islands, state news agency Xinhua said, defying calls from the United States and the …

  • SE Asia Stocks - Thai, Philippine indexes weak after trade data

    BANGKOK, May 26 (Reuters) - Most Southeast Asian stock markets rose in line with the rest of Asia on Tuesday but the Thai index pared early gains after weak trade data in April, while the Philippine benchmark ... …

  • Is your home on top of a faultline?
    Is your home on top of a faultline?

    The Philippine Institute of Volcanoly and Seismology (PHIVOLCS) recently issued an updated and high-resolution "atlas" of the East Valley Fault and West Valley Fault, two major faultlines that run through sections of Metro Manila. Metro Manila may be due for a 7.2-magnitude earthquake within this lifetime, say experts from the institute, among them PHIVOLCS director Dr. Renato Solidum, Jr. According to records, the last major earthquake caused by the West Valley Fault took place 357 years …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options