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BY STEVEN SPARKMAN
ANCHOR MEGAN MURPHY
Markets may have breathed a sigh of relief after European Central Bank President Mario
Draghi’s speech Thursday, but his comments got a very different reaction in Germany.
Draghi announced an unlimited bond-buying program to help countries like Spain and Italy
get a handle on their borrowing rates. (Video via Bloomberg)
While those countries have to agree to certain budgetary conditions in order to benefit,
German media portrayed Draghi as opening the floodgates on the German taxpayer.
The daily Die Welt said Draghi’s announcement set off alarm bells in Germany.
The tabloid Bild, Germany’s highest-circulating paper, accused Draghi of giving debt-ridden
states a blank check, and warned he would make the euro “kaputt.”
The business paper Handelsblatt ran the headline “German Fear” over a picture of the famous
painting The Scream, and warned Draghi’s actions raise fears of inflation.
One paper even said the ECB’s actions amount to appointing itself ruler of Europe, due
to the way Draghi overruled the objections of Germany’s Bundesbank president. euronews
explains.
“Draghi insists it does not break ECB rules. Germany’s Jens Weidmann dissented, saying
this is tantamount to financing governments by printing bank notes.”
So is it all just overreaction? A writer for the Economist says fears of inflation are
unfounded, but that doesn’t mean the German public will come around.
“The endemic fear of inflation, stoked by 20th century experiences, cannot be banished
by simple promises that the ECB will soak up the billions of euros that it is creating.”
The Economist also advised Draghi to simply avoid reading German newspapers. But the BBC
says the papers’ nationalist stance could have a real effect on policy as Europe moves
forward.
“After all, newspapers get agitated about all kinds of things without the world falling
off its axes. In this case, it does matter, because the views of the German people matter.
They constrain Chancellor Merkel as she heads to an election next year.”
Draghi’s announcement comes a week before Germany’s Constitutional Court will rule
on whether to ratify the zone’s $631 billion bailout fund. Germany’s contribution is
expected to make up 27 percent of the fund.