The European Central Bank’s task is to keep inflation in check, and it should therefore start tightening its monetary policy. This is what the governor of the German Bundesbank and a member of the ECB’s executive board, Jens Weidmann, thinks.
Weidmann even went further in an interview with Welt am Sonntag, recalling why the German central bank was so successful in rebuilding Germany and the next 50 years, emphasizing a healthy currency free from high inflation. “The European Central Bank is not here to take care of the solvency of individual eurozone countries,” Weidmann said.
If inflation in the ECB’s outlook is to show stable growth, the eurozone central bank should act in line with its goal of maintaining price stability. “We must make it clear again and again that if inflation rises in our outlook, we will tighten monetary policy. We cannot take into account the costs of states to finance their debts, “said the governor of the German Bundesbank.
According to Eurostat’s preliminary estimates, July inflation should rise to 2.2 percent in the euro area and even to 3.8 percent in Germany. On the other hand, in the countries of the southern wing, inflation is well below the 2% target, which creates an imbalance within the euro area, which is paid for by Germany, among others.
