ECB's Weidmann Spoils The Party: Says Leveraging EFSF Violation Of EU Treaty, Warns Of Hyperinflation
Trust the Germans in the ECB (those who have not yet resigned that is) in this case Jesn Weidmann, to come in and spoil the party:
- Weidmann, speaking in Berlin, says hyperinflation shows why monetizing debt wrong
- Prohibition on monetary financing an important achievement.
- Euro treaty rightly forbids monetary financing
- Stable prices should be key goal of ECB
- Leveraging EFSF with currency reserves prohibited
- Says monetary analysis may gain importance at ECB
And for all our MMT friends:
- "One of the severest forms of monetary policy being roped in for fiscal purposes is monetary financing, in colloquial terms also known as the financing of public debt via the money printing press:” Weidmann
- Pohibition of monetary financing in the euro area “is one of the most important achievements in central banking” and "specifically for Germany, it is also a key lesson from the experience of hyperinflation after World War I"
Summary from Bloomberg
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