Bundesbank chief threatened to resign

The head of the German central bank or Bundesbank has threatened to resign amid a festering fight with the European Central Bank over its anti-crisis measures, the Bild daily reported Friday. The Bundesbank declined to comment on the article.
Bild, quoting financial sources, said Jens Weidmann has repeatedly threatened to quit in protest over ECB chief Mario Draghi's plans to restart a contested bond-buying programme to help the eurozone's most debt-wracked countries.
The German government has pressed Weidmann to remain, however, and the Bundesbank chief - who like each of the other 16 eurozone central bank chiefs has only one vote at the ECB's monthly policy setting meetings - has agreed to stay on at least for the time being and fight his corner at next week's meeting. For the moment, he believes that is the way to fight for the stability of the euro and the independence of the ECB, the newspaper said.
"We are not commenting," a Bundesbank spokesman told AFP and pointed to Weidmann's recent interview in the weekly Der Spiegel magazine, where he was explicitly asked whether he had considered resigning. He replied: "I can do my duty best by staying in office. I'll work for the euro to remain just as stable as the Deutschmark."
The government's deputy spokesman, Georg Streiter, declined to comment on the specific reports but cited a recent television interview given by Chancellor Angela Merkel where she had expressed support for Weidmann. "She finds it good that he is always warning politicians," Streiter told a regular government news conference. "She also indicated that there are always discussions within the ECB. That's not unusual. It's like the European Council where there are always discussions between the 17 heads of state and government," he added. "And the federal chancellor of course supports him as our central banker to have as much influence as possible within the ECB," the spokesman concluded.
Weidmann argues the bond-buying programme, which has worked in the past at bringing down the borrowing costs of crisis-hit countries, is tantamount to monetary financing, where the central bank prints money to pay off a country's debt - expressly forbidden under the ECB's statutes. He fears the measures will fuel inflation, ease the pressure on over-spending governments to get their finances in order and erode the independence of the ECB.
"One should not underestimate the danger that financing by central banks can get one hooked like a drug," he warned in the latest edition of Der Spiegel magazine. Weidmann's predecessor Axel Weber already quit in protest over the programme, as did the ECB's former chief economist Juergen Stark, also a German. Weidmann has never made any secret of his opposition.
But Draghi issued a public plea for the German central banker to drop his resistance in a newspaper article earlier this week, saying the programme and other special emergency measures were justified by the current exceptional circumstances. A politician from Angela Merkel's conservative CDU party, budgetary expert Klaus-Peter Willsch, warned against the possibility of Weidmann resigning in an article in the online edition of the business daily Handelsblatt. "Weidmann will only be able to stay the course if he can sure he has the backing of his home country," Willsch said. "My plea is for German policymakers to allow no room for doubt on this," he said.