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Merkel: EU must not dictate ECB action

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Merkel: EU must not dictate ECB action
Photo: DPA
16:34 CEST+02:00
European Union governments must not be allowed to decide European Central Bank (ECB) action at Wednesday's summit on the eurozone debt crisis, Chancellor Angela Merkel said on Tuesday.

"We must not allow a misunderstanding, whereby politicians expect something from the ECB," Merkel told a press conference, referring to the role the central bank might play in helping deal with Europe's sovereign debt problem.

"We are negotiating with a view to have the ECB put forward its own point of view" on how it wants to help deal with the crisis, she said.

Germany is strongly attached to the ECB's independence and has long defended its right to be the final arbiter of monetary policy.

A statement currently being discussed for adoption by Wednesday's EU summit refers to demands by EU leaders that the ECB maintain support measures for banks and indebted eurozone governments.

"Germany does not accept such a sentence in the communiqué," Merkel told reporters following a meeting with Bangladeshi Prime Minister Sheikh Hasina Wajed.

The proposed EU statement says: "We fully support the ECB in its action to ensure price stability in the euro area, including its non-standard measures in the current exceptional financial market environment."

The ECB has so far bought a total of €169.5 billion in eurozone government bonds since it first began operations early last year as part of efforts to ease debt strains in the 17-nation bloc.

Current plans would see a newly boosted European Financial Stability Facility (EFSF) take over responsibility from the ECB for buying the bonds of debt-troubled countries.

German newspapers on Tuesday expressed concern, however, that the EFSF would not have the fire-power needed to deal with contagion if the crisis spreads further.

Quoting diplomatic sources, several newspapers suggested the ECB would have to continue helping the EFSF provide financial clout to deal with the crisis.

Merkel appears determined to maintain a firewall between the EFSF and the ECB, which, according to its constitution, should be free of all outside political influence.

AFP/emh

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