German Chancellor Angela Merkel on Friday welcomed conditions attached to a new ECB bond-buying programme aimed at solving the eurozone debt crisis, saying governments also had work to do. "The ECB made clear yesterday ... that the future of the euro will to a large extent be determined by political action and that the conditionality is a very important aspect," Merkel said after talks with Austrian counterpart Werner Faymann.
"Responsibility and checks, or help and checks and conditions, always go hand in hand," she told a joint news conference in Vienna. "That is the way we have always chosen and so I believe we have the political duty to solve politically the difficulties that we have together. And the ECB is playing its role with its particular responsibilities."
--- German media, lawmakers decry ECB 'blank cheque'
Germany's conservative press accused the European Central Bank on Friday of writing a "blank cheque" to indebted euro zone states by agreeing to buy their bonds, and some pro-government lawmakers threatened legal action to stop the purchases. ECB President Mario Draghi unveiled plans on Thursday for potentially unlimited purchases of bonds of up to three years maturity of countries that request a European bailout and fulfil strict policy conditions. The German central bank chief was the sole dissenting voice in the decision.
"Blank cheque for the indebted states," was the headline of the top-selling Bild tabloid, a harsh critic of the bailouts for Greece and other struggling euro zone nations, adding that the ECB move could make the euro "kaputt". "Draghi sets off Germany's alarm bell," was the headline in the conservative daily Die Welt. An opinion poll released on Thursday showed nearly one in two Germans has little or no confidence in the Italian Draghi.
Many German conservatives share the concern of Jens Weidmann, head of the Bundesbank, that the bond-buying plans violate a taboo on financing deficits, remove pressure on governments to reform and will eventually stoke inflation. Several MPs vowed legal action to block the plans. "We should consider making legal checks on whether the ECB has hugely overstepped its mandate. I am convinced that this is the case," Klaus-Peter Willsch, a leading eurosceptic member of Merkel's Christian Democrats (CDU), told German radio.
Weidmann was isolated in Thursday's meeting of the ECB Governing Council, where mighty Germany, with 82 million people and Europe's biggest economy, has just one vote like tiny Malta. Investors cheered the ECB rescue plan, with the euro and stocks rising world-wide and the borrowing costs of Spain and Italy tumbling. Die Welt headlined the market reaction bitterly "Financial markets cheer the death of the Bundesbank."
Frank Schaeffler, from Merkel's junior coalition partner the Free Democrats, said Germany should file a lawsuit with the European Court of Justice, saying the ECB was in danger of turning into a "bad bank for all the junk debt of Europe". Speaking in Stockholm on Friday, Finance Minister Wolfgang Schaeuble contradicted Weidmann, saying the bond buying plans did not mark the start of monetary financing of sovereign debt. He dismissed the media outcry as exaggerated.
Business daily Handelsblatt, which often voices concern at the financial burden of the bailouts on German taxpayers and companies, drew a link between the ECB's latest plans and the pending court ruling, and criticised the "democratic deficit of the euro rescuers".