Tietmeyer calls for unity on fiscal policy

 

Bundesbank President Hans Tietmeyer has warned that a continuing political dispute about the role of monetary policy could harm Europe's integration by sparking conflict between the European Central Bank and euro member nations.

Mr Tietmeyer also called on politicians to refrain from watering down the stability and growth pact on maintaining fiscal discipline in monetary union.

In an opinion piece for Rheinischer Merkur, due to be published on January 1st, he said it was a fallacy to believe that jobs could be created by relaxing monetary policy.

"The best contribution monetary policy can make towards lasting growth and more employment is to give a clear orientation towards stability which makes it easier for the economy to plan ahead," Mr Tietmeyer writes.

"This is particularly true in today's environment, as unemployment in Europe mainly stems from structural causes. European monetary policy cannot relieve other policy areas of their tasks."

Mr Tietmeyer's comments follow months of demands from politicians, most notably German Finance Minister Oskar Lafontaine, for the ECB and national central banks to cut interest rates to help boost job creation and growth.