FRANKFURT, Germany – A top European Central Bank official is warning that the bank's stimulus measures are easing pressure on indebted governments to straighten out their finances.
Jens Weidmann of Germany said Wednesday that current low borrowing rates offer "few incentives for governments to consolidate their budgets" since debt does not incur high interest costs.
Weidmann sits on the ECB's governing council by virtue of his post as head of Germany's Bundesbank, or national central bank. He has been a steady critic of the ECB's decision to use newly printed money to purchase government bonds and corporate bonds, driving interest yields down.
He is just one vote on the 25-member council. Stimulus critics, however, have grown louder as the eurozone economy recovers and inflation nears the bank's goal of just under 2 percent.