Idea of return to deutschemark 'absurd': Bundesbank

14th December 2011, Comments 0 comments

The idea of abandoning the euro in the current eurozone debt crisis and returning to the deutschemark as called for by some people in Germany is "absurd," Bundesbank chief Jens Weidmann said.

"We're doing everything we can so that that scenario won't come about," Weidmann said in remarks made available for publication on Wednesday.

"The scenario we're working on with the European Central Bank is a scenario for a solid euro," he told reporters.

Weidmann, along with German Finance Minister Wolfgang Schaeuble, is scheduled to celebrate the 10th anniversary of the introduction of euro notes and coins at a ceremony in Berlin later on Wednesday.

"There's no plan B, no printer in the Bundesbank's cellars," he quipped.

"The only deutschemarks still in existence are those on display in the currency museum and those which people are still coming to us with to exchange" for euros.

Weidmann again rejected calls from politicians and economists for greater intervention on the part of the ECB to support debt-mired eurozone states.

"We have to tackle the root of the problem instead of looking for some sort of nuclear option," the central bank chief said, making fun of the term "bazooka" frequently used by analysts and European leaders.

Weidmann argued that it was up to the eurozone's bailout funds, the temporary European Financial Stability Facility and its permanent successor, the European Stability Mechanism, to come to countries' aid.

"It is the EFSF which is the legitimate body. We can talk about the guarantees it has at its disposal, whether they're sufficient or not. But not the instrument itself," he said.

The lack of success of the strategies currently being pursued stemmed from the fact that "a new idea is discussed at every summit," Weidmann said.

"Let's first implement what has been decided and then see," he said.

The ECB's role was clear, to "maintain monetary stability" and not to "finance governments" by buying up their debt, he insisted.

"Respecting the dividing line between monetary policy and fiscal policy helps to safeguard (the ECB's) independence (and its) ... ability of fulfill its mandate," he said.

© 2011 AFP

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