“This agreement of the heads of government, which according to our knowledge has been reached without any consultations from central banks, implies risks to stability that should not be underestimated,” said a Bundesbank document quoted by the daily Frankfurter Rundschau.
A Bundesbank spokesman told AFP an internal working paper existed but declined to comment on its content and stressed that it had not been presented to central bank directors nor validated by them.
The comment nonetheless reflects the general position of Germany, the eurozone’s biggest member, on aid to debt-ridden Greece. Berlin is sceptical of bailing out Athens in part because it might lead to similar demands from other eurozone countries.
Germany’s constitutional court might also be asked to rule on any aid to Greece, with the outcome uncertain since sending billions of euros to Athens could also strain Berlin’s own stretched finances.
But the EU agreement could force the Bundesbank to transfer funds to the Greek finance ministry, according to the internal paper, something that might also be contested in court.
The plan would result in Germany “transferring x billion euros directly to the Greek Finance Ministry,” the paper said, with Berlin sure to be the biggest contributor to any rescue plan.
It criticised the International Monetary Fund, dubbing it an “Inflation Maximizing Fund” because the chief IMF economist has backed a higher inflation target than the one accepted by the Bundesbank and the European Central Bank. German political leaders have nonetheless insisted that the IMF be a part of any Greek bail-out.
Meanwhile, German law professor Joachim Starbatty told the Financial Times Deutschland he would ask the country’s Constitutional Court for a ruling “if the
step is taken from a monetary union to shared responsibility,” that is if Germany were forced to contribute to a Greek bailout.
Starbatty and a handful of other jurists and economists have unsuccessfully questioned the euro’s legality before the court, but German judges have since handed down a ruling that strengthened the parliament’s powers with respect to the EU.
Financial markets have not been impressed by EU expressions of support for Greece meanwhile, and the interest or yield on Greek sovereign bonds leapt on Thursday to their highest level since the country joined the eurozone in 2001, to 7.423 percent.