'I was already critical of the sovereign bond purchases that have been made to date -- and I was by no means alone in that respect. Such a policy is too close to state financing via the money press for me..'<blockquote>'..The causes of the crisis lie in the high level of indebtedness, the lack of competitiveness of some member states and, last but not least, the lost confidence in the architecture of the monetary union. These fundamental problems must all be tackled rigorously, without hesitation, and with perseverance. This will contribute to the cohesiveness and credibility of the monetary union.
..
I was already critical of the sovereign bond purchases that have been made to date -- and I was by no means alone in that respect. Such a policy is too close to state financing via the money press for me. The central bank cannot fundamentally solve the problems this way. It runs the risk of creating new problems.
..
..it only works if the underlying problems are really tackled, and if the programs are designed and monitored in such a way that people don't lose sight of budgetary discipline.
..
..the central bank is not omnipotent. Remember the euphoric op-eds that were published when the Eurosystem purchased sovereign bonds for the first time? Or how the markets cheered the liquidity assistance provided by the central bank for European banks last winter? But we all know that such actions do not solve the fundamental problems..
..
..we shouldn't underestimate the danger that central bank financing can become addictive like a drug.'
- Jens Weidmann (
'Too Close to State Financing Via the Money Press', August 29, 2012)</blockquote>
Context<blockquote>
'..to the role Credit played in economic cycles..' - Doug Noland
(An Austrian Defense of the Euro) '..Mises and Hayek deserve to finally triumph..' - Jesús Huerta de Soto
'..today’s monetary charlatans: They are content to completely ignore history..'Europe's Dangerous Dream of Unlimited Money - David Böcking
(Europe) - '..the countries in crisis are becoming more competitive..''..a private law society..' versus '..a “great band of robbers,”..''..present violation of law..' - Otmar Issing
Banking Reform