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Uproar as Merkel defends bond plan

German Chancellor Angela Merkel defended the European Central Bank as independent and strong yesterday following uproar in Germany over the bank's new bond-buying programme for struggling eurozone states.

"The ECB is an independent and very strong institution," she told reporters when asked her opinion of the scheme during a trip to Vienna. She emphasised that help for struggling eurozone members would not come without strings attached.

"Conditionality is a very important point. Control and help, or control and conditions, go hand in hand," she said. "This is the path we have always followed."

Ms Merkel's finance minister echoed her sentiments. The bond-buying plan was within the ECB's policy mandate and the negative reaction it prompted in the German media was unwarranted, Wolfgang Schaeuble told a news conference in Stockholm.

Austrian Chancellor Werner Faymann, who has not always followed Ms Merkel's lead on eurozone debt crisis issues, also welcomed the ECB approach.

"I . . . see the decision by the ECB -- which is independent and makes its own decisions -- as really positive because it is a further step on the way to making government bonds more secure again for investors," he told a joint news conference after meeting his German counterpart.

ECB chief Mario Draghi unveiled the new plan on Thursday to lower the borrowing costs of eurozone states such as Spain and Italy by buying their bonds.

Countries that want to take part must agree to conditions in a programme with the European rescue fund. The central bank chief also said the International Monetary Fund should help design conditions linked to any support.

Germany's central bank opposes the ECB's move. Ms Merkel has supported Mr Draghi while saying Bundesbank chief Jens Weidmann's public criticism has been useful too. (Reuters)

Irish Independent