January 16, 2012
The former chief economist of the European Central Bank wrote a farewell letter to the bank's staff in which he criticized the policy of buying bonds issued by ailing euro-zone states, SPIEGEL has learned. The ECB was wrong to subordinate itself to the needs of fiscal policy, and could not solve the problems of the euro zone, he wrote./i>
The former chief economist of the European Central Bank, Jürgen Stark, has levelled strong criticism at the bank and revealed why he decided to resign from his post last year.
According to information obtained by SPIEGEL, Stark wrote a farewell letter to the bank's 1,600-strong staff in which he accused his former colleagues in the Governing Council of having taken decisions "that stretched the mandate of the ECB to extremes."
Stark said he saw a risk that the bank was increasingly "operating under fiscal domination" because of its purchases of government bonds. He said it was "an illusion to believe that monetary policy can solve major structural and fiscal problems in the euro zone."
He also warned that history had shown that whenever a central bank subordinated itself to the needs of fiscal policy, it had to make concessions when it came to its true task of keeping the value of money stable.
More
No comments:
Post a Comment