A decision by the European
Central Bank to begin buying asset-backed securities (ABS) later
this year could put taxpayers at risk, said the head of the
Bundesbank.
"The credit risks taken by private banks would be
transferred to the central bank and therefore, to taxpayers
without them getting anything in return," Jens Weidmann said in
an interview published on the weekend in the German magazine
Focus.
Weidmann, who is also a member of the ECB's governing
council, complained that the central bank is talking down the
value of the euro, which he said could have repercussions beyond
what is expected.
The value of the euro has been falling as the ECB moves to
buy securities amid weakness in the eurozone economy.
A spokesman for German Finance Minister Wolfgang Schaeuble
declined to comment Monday on the ABS purchase plan.
"We do not comment on the decision of the ECB," said Martin
Jaeger.
"We will wait and see".
Meanwhile, Berlin insisted that it was not in favour of
using resources from the European Stability Mechanism (ESM) to
promote growth in the eurozone.
"The German government sees no reason to use the ESM," said
spokesman Steffen Seibert.
"The European Stability Mechanism is to be used for
emergencies and as a last resort, for financial stability," he
added.
German newsmagazine der Spiegel, in an article on Italian
Premier Matteo Renzi, described Italy as a "country in agony".
Reforms proposed by Renzi are "whitewash" and soon the
economy, now in its third recession, will collapse.
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