Financial Times
Editorial
September 11, 2011
The gap between the economically necessary and the politically acceptable continues to hinder the eurozone from resolving its sovereign debt crisis. Jürgen Stark’s resignation from the European Central Bank’s executive board threatens to widen the gap further.
Mr Stark’s bombshell will be received by many Germans as confirmation that ECB purchases of sovereign bonds violate the promise on which monetary union was sold: that the euro would obey a German monetary policy.
This is untrue. The ECB has, as its president Jean-Claude Trichet points out, delivered more stable prices for Germany than the Bundesbank did. Crucially, by boldly deciding to intervene in bond markets, the ECB did more for financial stability in the euro area than any other institution has done.
In the narrow sense of economic policymaking, Mr Stark’s departure may make it easier for the ECB to play its crisis management role. His mooted successor, Jörg Asmussen, is seen as less hawkish on monetary policy. But it would only make the political problem worse. The more Germans fear that the ECB has overstepped its boundaries, the more chancellor Angela Merkel will struggle to gain acceptance for effective measures to end the eurozone’s crisis.
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