The president of the German central bank Jens Weidmann could quit his job over the planned bond buying scheme by the ECB. Weidmann already expressed his reservation in the last rate decision by the ECB, and could take one step further, walking in the footsteps of his fellow countrymen Axel Weber and Jürgen Stark.
This is what is feard in Berlin as Weidmann finds himself isolated. The other German in the ECB, Jörg Asmussen, gave his backing to Draghi’s program.
The German economic paper Handelsblatt quotes Willsch Emil, a member of parliament from Merkel’s CDU party that is a member of the budget committee. This is reported by El Economista (Spanish, Google Translated)
Mario Draghi and the other members of the ECB’s executive board have cancelled their planned trip to Jackson Hole due to heavy workload. Who is going? Jens Weidmann. While he’ll go for only one day (instead of 3 originally planned), he is going in separate paths from the rest of his colleagues.
A German support or at least acquiescence is needed for the grand plans of Draghi to run smoothly. Draghi suggested buying bond en masse to combat the “unacceptable” yields of some countries. The high yields represent the risk of “convertibility” – a break up of the euro, which Draghi vowed to defend.
Draghi did condition such action by a formal aid request by the countries that need aid (Spain being first and foremost), with conditions such as austerity applying.
Spain is getting closer to submitting a request, especially after the Spanish region of Catalonia asked for help from the Spanish government.
Further reading: 3 Reasons to be Optimistic About Europe
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