Angry Draghi fights back at German ECB critics
An increasingly public row between Germany's government and the European Central Bank (ECB) overshadowed yesterday's meeting of the bank's governing council in Frankfurt.
A visibly annoyed ECB President Mario Draghi publicly called on critics to give the bank's policies time to work, and warned that attacks on the institution could lead to further measures being needed.
"Any time the credibility of a central bank is perceived as being put into question, the result is a delay in the achievement of its objectives -- and therefore the need for more expansion," the ECB president told reporters in Frankfurt, raising his voice.
"Our policies work, they are effective. Just give them time."
The ECB has been under fire from German politcial leaders including Finance Minister Wolfgang Schauble for its loose money policies.
Earlier this month Mr Schauble said the ECB's actions were partly to blame for the rise of populist political groups, including Germany's rapidly growing Alternative for Deutschland.
In Frankfurt Mr Draghi said Germany could not dictate policy. "We have a mandate to pursue price stability for the whole of the euro zone not only for Germany," he told a news conference," he said.
"We obey the law, not the politicians, because we are independent as stated by the law," he added.
The independence of the Frankfurt-based ECB is anchored in the EU treaty, Mr Draghi said.
Last night German Chancellor Angela Merkel said that German criticism was legitimate, but claimed it wasn't an attempt to interfere with the bank's independence.
"The ECB is independent in its policies. It has a clear mandate," Merkel said after talks with Dutch Prime Minister Mark Rutte.
"It's legitimate that people in Germany discuss the fact that interest rates have been much higher but that shouldn't be confused with interference in the independent policy of the ECB, which I support."
The ECB left its benchmark interest rate at zero and the deposit rate at minus 0.4pc, and maintained asset purchases at €80bn a month, as predicted by economists. Officials cut rates and expanded quantitative easing at their previous meeting on March 10, when they also added corporate bonds to QE and announced a new series of long-term loans for banks. (Reuters)