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Business

Chancellor backs Bundesbank boss in ECB row

According to media reports, the head of Germany's central bank has considered stepping down from his post in protest against ECB bond-buying plans. But the government in Berlin does not want to let him go just like that.

The German government on Friday threw its weight behind Bundesbank Chief Jens Weidmann in an ongoing row between the German banker and ECB Chief Mario Draghi.

"German Chancellor Angela Merkel has reassured Jens Weidmann of her full support and backs every move to give him as much influence as possible in the European Central Bank's decision-making process," a spokesman for the government, Georg Streiter, told reporters in Berlin on Friday.

The remarks came on the back of a report in the German mass-circulation daily Bild, which claimed in its Friday edition that Weidmann had considered stepping down from his post several times in recent weeks to voice his dissatisfaction at Draghi's plans to resume the ECB's controversial bond-buying program. That program aims to keep borrowing costs down for debt-stricken eurozone nations such as Italy and Spain.

Showdown ahead

Weidmann had frequently made it clear that, for him, such interference in financial markets was not acceptable.

"For me such a policy is close to state financing through the printing press," the Bundesbank Chief told German magazine Der Spiegel.

He added that a reactivation of the bond-buying program would only lead to cash-strapped euro area members becoming "addicted."

Weidmann has been spearheading criticism of the ECB's policies, with the central bank's Mario Draghi obviously willing to consider a new round of bond-buying at a crucial executive meeting on September 6.

hg/sej   (Reuters, dpa)