August 23, 2011, 1:26am
GERMANY’S Bundesbank has sharpened its criticism of the Eurozone’s bond buying policy, warning yesterday that the stability efforts were in danger of increasing states’ tendency to build up debts and will weaken incentives for pursuing orderly fiscal policies.
In its monthly report, the German central bank said that agreements made by Eurozone leaders “result in a further big step towards joint liability and reduced disciplining via the capital markets”.
The agreements reduced incentives for countries under Eurozone aid programmes to pursue economic reforms as quickly as possible, the bank added.
The criticism puts further pressure on German chancellor Angela Merkel, who is trying to drum up support for the bond-buying scheme.