Draghi urges Germany to back ECB rescue plan

 
Julian Harris
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EUROPEAN Central Bank chief Mario Draghi urged Germany to support its plan to buy up more bonds of troubled Eurozone governments, at a speech in Berlin yesterday.

Draghi said that he respected German reservations over further interventions from the ECB, yet insisted that it is in the country’s interest to get behind measures intended to ease pressure on indebted member states.

The ECB president said he had “enormous respect” for the German Bundesbank, but added: “In the current circumstances, the greatest risk to stability is not action, it’s inaction – this is why the ECB has acted.” Citing “very severe fragmentation” in financial markets, Draghi said his body has no option but to act.

“The ECB’s governing council therefore faced a choice: to accept this situation and allow the singleness of its monetary policy to be undermined; or to take actions within its mandate to restore the normal transmission of monetary policy across all parts of the euro area. We decided in favour of the latter,” he said.

Earlier in the day German Chancellor Angela Merkel had repeated her opposition to sharing Eurozone states’ debt burden, arguing that it would create “fatally wrong incentives” for governments.