ECB chief defends rate against attacks from Germany – Reuters Germany

Frankfurt the European Central Bank (ECB) has defended its ultra-loose rate against the sharp criticism from Germany.

“We follow the law, not the politicians,” ECB President Mario Draghi said on Thursday in Frankfurt. The ECB has a mandate to maintain price stability for the entire euro zone, “not only for Germany”. The monetary policy of the ECB recipes are not much different than in other parts of the world. “And our actions have an effect. They are effective. Give them only time,” said the Italian.

Several Union politicians have the federal government prompted to press for a change in monetary policy , Finance Minister Wolfgang Schaeuble expressed concern recently that the ECB could convey Euro-skeptic efforts. CSU politician had media coverage in the “image” requires that the next ECB president must be a 2019 German to end the tenure of Draghi. Earlier Draghi had been dubbed by the CSU already as “counterfeiter”. The German banking industry has long complained that the zero interest rate environment, it makes them more difficult to sufficiently generate returns in classic interest income. Life insurers have problems redeeming their customers promised returns promised.

A lively debate is welcome, Draghi said. Because that help to explain monetary policy steps. “But criticism of a certain type could be seen as such, that it threatens the independence of the ECB.” In the Governing Council have unanimously dominated the view, to defend this independence. It is clear that pension funds and insurers were hit by low interest rates seriously. Not everything that had gone wrong in the sector, but can be shifted to the low interest rates.

Positive effects of monetary policy are obvious added Draghi. So take to the lending and it would also be less loans declined. The economic recovery in the euro zone to hold. According to the ECB chiefs will however still hampered by slow implementation of reforms. “Other policy areas must show more determination, both at national and European level.”

The ECB will now focus on the implementation of the steps after her adopted in March of measures. So to be purchased from companies outside the banking sector from June bonds. Six national central banks, including the Bundesbank should that drive purchases. Only corporate bonds with good credit score get this into consideration. Commerzbank expects to reach a monthly purchase volume of about three billion euros.

key interest REMAINS AT RECORD LOW

The interest rates groped Draghi & amp; to not co on the Council meeting. The key phrase for the supply of commercial banks with central bank money remains at 0.0 percent, its lowest level since the start of monetary union. The ECB will monitor the evolution of inflation accurately explained Draghi. If necessary will act the Fed. The controversial concept of direct cash gifts to the citizens – the so-called “helicopter money” – is not, according to the ECB chief but on the agenda. “We have never discussed it.” The topic is very complex because it is legally and operationally difficult to implement.

“The ECB holds the instrument in the hindquarters,” said BayernLB economist Johannes Mayr. “We do not believe that it will come.” However, the ECB intends to use the debate as an instrument to counteract doubts about further easing options. Nordea Bank economist Holger Sandte said the ECB will not hesitate which to ease monetary policy further if the expected increase in inflation ausbleibe or economic einknicke.

The Euro Guardian have now begun to expand as planned its monthly asset purchases to 80 from previously EUR 60 billion. Since March 2015 ECB holds particularly wide open its monetary floodgates. Since the ECB and the national central banks of the euro countries to buy government bonds massively. The controversial program to ensure greater economic growth. The low inflation will be pushed up. The program is now applied to 1.74 trillion euros and is still running until the end of March 2017th Banks should be forced out of the bond markets and money rather than sufficient credit to the economy.