LEGISLATORS in Chancellor Angela Merkel’s coalition are demanding a reform of the European Central Bank’s (ECB’s) voting system to strengthen Germany’s influence, highlighting worries in Europe’s biggest economy about the bank’s bond-buying plans.
Ms Merkel has shown no sign of concern about ECB president Mario Draghi’s approach. But many Germans, fed up with bailing out eurozone states, fear the ECB’s plans to buy government debt to reduce crippling Spanish and Italian borrowing costs, would amount to the financing of governments — which the bank is not supposed to do. They also argue it would ease pressure on governments to cut debt.
"We need a new alignment of voting weights in the ECB’s decision-making committees according to the proportion of liability (a country takes on)," eurosceptic MP Klaus-Peter Willsch told Handelsblatt. Mr Willsch, a conservative, is a well-known rebel in Ms Merkel’s coalition and one of the most vocal critics of bail-outs. He has lodged complaints with Germany’s Constitutional Court.
"Under Draghi, the ECB is mutating into a state financier and a ‘bad bank’ against European constitutional law," he says, demanding a veto right for Germany in all ECB decisions. More senior members of the coalition added their voice to opposition to the ECB’s plans.
"The purchase of sovereign debt by the ECB on the secondary market must remain the absolute exception," leading Christian Social Union (CSU) MP Stefan Mueller told Reuters.
The CSU, which shares power in Ms Merkel’s coalition, tends to be more eurosceptic than her Christian Democrats (CDU).
After Mr Draghi said last month he would do whatever it took to save the euro, Ms Merkel and French President Francois Hollande issued a statement echoing his pledge. German Finance Minister Wolfgang Schaeuble also welcomed Mr Draghi’s verbal intervention, which has brought a measure of calm to markets.
It is highly unlikely the ECB will change its operating rules and, in private, people close to Ms Merkel have expressed exasperation at the pressure the Italian is coming under in Germany.
They note that previous Bundesbank heads took extraordinary measures in the decades before the creation of the euro, and were even pressed at times to take specific policy steps by German leaders, but their independence was never questioned on the scale that Mr Draghi’s is now.
Senior CDU member Michael Meister dismisses the debate on reforming the ECB as an illusion. "There is no question of changing the ECB at the moment. So this is an illusional discussion," he says.
But there is still plenty of resistance to the bond buying in Germany, the eurozone’s pay-master which has already guaranteed €310bn in bail-outs. Bundesbank chief Jens Weidmann is the voice of opposition in the ECB, although he looks isolated there.
Resentment that Italy, viewed by many Germans as fiscally irresponsible, was ever allowed to join the euro runs deep in Germany and some politicians privately accuse Mr Draghi of running an "Italian central bank".
Jan Muecke, a state secretary in the transport ministry and a member of junior coalition partner the Free Democrats, even demands a ban on the purchase of bonds. "We urgently have to remove the basis for the ECB to buy further sovereign bonds," Mr Muecke told Handelsblatt.
Free Democrat Frank Schaeffler, another dissenter in Ms Merkel’s coalition, has also appealed for reform. "We need a reform of the voting system in the ECB council. That Cyprus and Malta have as many votes as Germany is a serious mistake," he told Handelsblatt.
Reuters
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