ECB cannot solve Europe's problems: Schaeuble
The European Central Bank cannot solve Europe's problems and its loose monetary policy could even reduce the incentive for governments to implement reforms, German Finance Minister Wolfgang Schaeuble said on Friday.
"There is the danger that this monetary policy, in addition to all good arguments, is understood in some European countries as a false incentive, not to deploy necessary reforms," Schaeuble told the European Banking Congress in Frankfurt.
"As the ECB itself says, monetary policy cannot create sustainable growth, it can buy time for reforms, but it cannot solve the fundamental problems," the minister said.
Throughout the long-running crisis, the ECB has slashed its key interest rates to new all-time lows and also rolled out a number of unprecedented emergency anti-crisis measures.
But it has always acted within its mandate, Schaeuble insisted, rejecting criticism to the contrary within Germany.
"No decision has ever overstepped the ECB's mandate," the finance minister insisted.
The ECB's decision to purchase the sovereign bonds of crisis-wracked countries has particularly angered many people in Germany, who see it as a way of financing government debt which is forbidden under the central bank's mandates.
A number of critics have even taken their case to Germany's highest court, the Constitutional Court, which is currently examining whether the ECB's OMT bond purchase programme is compatible with the country's Basic Law.
The court held a two-day hearing on the issue in June and said Thursday it will not issue its verdict until next year.
© 2013 AFP