BERLIN (Reuters) - Germany’s Economy Minister Philipp Roesler said on Wednesday he opposed granting a banking licence to the euro zone’s new bailout fund, saying this would stoke inflation and relieve pressure on countries to reform their economies.
Some euro zone governments say the fund, the European Stability Mechanism (ESM), should receive a banking licence from the European Central Bank that would allow it to buy virtually unlimited amounts of debt, thus pushing down yields for heavily indebted countries such as Spain and Italy.
“The chancellor (Angela Merkel), the finance minister (Wolfgang Schaeuble) and I are all agreed that ... a banking licence for the European Stability Mechanism cannot be the path we take,” Roesler told reporters.
“We do not want to take the path to an inflation union but ... to a stability union,” he said.
Roesler, leader of the pro-business Free Democrats, junior partner in Merkel’s centre-right coalition, also said he expected the European Central Bank to remain focused on its core task of maintaining price stability in the euro zone.
Reporting by Gernot Heller, writing by Gareth Jones