German Fears About Inflation Stall Bold Steps in Debt Crisis

[alp227]

Source: NYT

Many economists say aggressive purchases of the sovereign bonds of heavily indebted states by the European Central Bank are the quickest and surest path to stabilizing the crisis. On Thursday, Mario Draghi, the bank’s president, laid the groundwork for bolder intervention in markets if certain conditions were met.

To German ears those bond purchases, or anything that smacks of printing money, sound like a recipe for skyrocketing prices. German leaders, including Chancellor Angela Merkel and her former economic adviser, Jens Weidmann, now head of the German Bundesbank, have strongly discouraged any such move by the European Central Bank, stalling the rescue of the euro zone in the view of critics.

Read more: http://www.nytimes.com/2011/12/02/world/europe/haunted-by-20s-hyperinflation-germans-balk-at-euro-aid.html?pagewanted=all