This picture taken in one of the sessions of October 9 meeting of the fall of the International Monetary Fund (IMF) in Washington DC, speaks for itself. The smile of Mario Draghi, President of the European Central Bank (ECB), which finds an ally in the IMF for more monetary stimulus to prevent deflation and double-dip recession in the euro zone, in contrast to the face of few friends Wolfgang Schauble, the Minister of Finance of Germany.
The differences between the ECB and responsible monetary and German Finance have risen tone in public in recent weeks. The Bundesbank, Germany’s central bank, multiple interventions through its Governor, Jens Weidmann, raises many questions about the new step taken by the ECB this month to launch a vast program of acquisition of private financial assets, a decision against which Weidmann voted on meeting of September 4th. For its part, Wolfgang Schäuble, the German finance minister government headed by Angela Merkel, has followed in the footsteps of Weidmann and raised his voice against intervening “drift” of the ECB.
Weidmann and Schauble are pronounced also frontally against any development in the ECB’s monetary policy for a program to purchase sovereign debt of euro members, considering such a move as forbidden by the mandate of the central bank.
Remember that the IMF, in “Global Financial Stability Report”, released this week, urged the ECB to move this unconventional extreme solution in the case of the risk of deflation and recession materialize in eurozone . In “World Economic Outlook”, now published, IMF staff revised upwards the odds of deflation and a relapse into recession for the third time in the eurozone.
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