Bundesbank head, Jens Weidmann was interviewed by Germany’s Handelsblatt.
The news has been out over the weekend so I’ll just summarise the main points.
With strong words on the EU crisis he says;
The structural problems in the crisis countries have built up over a long period of time. They can’t be resolved in just a few quarters, but will need years. It’s factually wrong to say the crisis is over and will only lead to an easing up of reform efforts
On the subject of low rates;
My assumption is not that interest rateswill remain low for years, not least because the economic impulse of ultra-easy monetary policy will fade with time and the risks for financial stability will increase
He also spoke about Greece and the possibility of another round of aid and debt restructuring saying that;
another restructure would only see us facing the same problem in 5 years and is counterproductive and a wrong signal to program countries
Further comments are just crossing the wires from a speech he is giving in Berlin
- ECB nond purchases would weaken countries own responsibility to solve problems
- ECB should preserve price stability to contribute to crisis solution
- Monetary policy has entered unknown dangerous ground and can only provide time to solve crisis
- Banks must be allowed to fail
- ECB Monetary policy has already made significant contribution