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The European Central Bank holds its monthly monetary policy meeting tomorrow amid one of the most overheated political environments for Mario Draghi and his fellow governors since the height of the eurozone crisis. And despite the German government’s long-stated insistence that central banks should jealously guard their independence and not be pressured by elected officials into making decisions that are politically expedient, the most pointed criticism is coming from Berlin.
The most surprising broadside came nearly two weeks ago from Wolfgang Schäuble, the German finance minister, who publicly claimed to have told Mr Draghi that his loose money policy was to blame for about 50 per cent of the votes received by the ascendant anti-immigrant Alternative for Germany party in last month’s regional elections. Mr Schäuble also called on the US, UK and the eurozone to band together in pressuring their central banks to “carefully but slowly exit” their economic stimulus policies. Hardly the model of respecting central bank independence.
Mr Schäuble’s remarks appear to have opened the floodgates. Hans-Peter Friedrich, a former interior minister in Chancellor Angela Merkel’s government and a member of the Bavarian sister party of her governing Christian Democrats, told the mass-market Bild tabloid at the weekend that Mr Draghi’s replacement “must be German” and respect the Bundesbank’s tradition of “monetary stability”. Axel Weber, the former Bundesbank chief who nearly beat Mr Draghi out for the top ECB job in 2011 before resigning, told the Wall Street Journal this week that more monetary easing would be counterproductive. Read more