According to the CDU, the ECB should not step in as a helper, but the European rescue fund ESM.
(Photo: AP)
Berlin There will be sharp criticism of the European Central Bank (ECB) at the CDU party conference in Hanover in early September. In a motion by the economic wing, the central bank is accused of operating “indirect state financing” through its new crisis instrument TPI. The Applications Committee recommended approval. It is therefore likely that the federal party conference will decide on the paper in this way.
The application of the SME and Economic Union (MIT) is entitled: “Europe – through the crisis with a clear financial policy compass and without a debt union”. The CDU economic wing criticizes the new bond purchase program.
With the Transmission Protection Instrument, abbreviated TPI, the ECB wants to buy bonds from highly indebted euro countries if they should come under pressure on the bond market due to rising interest rates.
MIT’s application states: “This is against the European treaties, acts as an obstacle to reform and gives room for speculative transactions.” It calls on the ECB to “return to its monetary policy mandate”.
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In other words, the CDU economic politicians accuse the central bank of not only pursuing monetary policy, but also of deliberately supporting highly indebted states with its bond purchase programs.
Many countries shy away from the ESM
According to the CDU, the ECB should not step in as a helper, but the European rescue fund ESM. “We reject the new ECB purchase program and call for the use of instruments that are linked to clear preconditions, such as the proven European Stability Mechanism (ESM) and the use of a clearly conditioned OMT program.”
With the OMT program, the ECB can also buy government bonds, but only if the country in question takes advantage of an aid package from the rescue fund with corresponding binding reform requirements. The conditions come via the detour ESM, so the OMT program does not exist without the rescue fund.
However, due to the conditions that can affect savings such as the labor market – and which are also monitored – many states shy away from going to the ESM. Recently, the rescue fund was therefore no longer used. During the corona crisis, a new recovery fund was set up at EU level. For the first time, the EU was allowed to incur large amounts of debt itself.
According to the CDU economic wing, this should remain a one-time exception. According to the application, the Corona recovery fund should not become “a blueprint for future “facilities” based on EU bonds with a proportionate liability of the EU member states.
>> Read here: Federal Bank-President defends ECB decisions – “The process of rate hikes must continue”
The CDU economic politicians are also calling for a reform of the EU debt rules. The Stability and Growth Pact should be concentrated “on a few basic rules”. According to MIT’s wishes, this includes a requirement that limits the increase in government spending and debt. The requirement that a state’s deficit should not exceed three percent of gross domestic product (GDP) already exists. What is new about the demands is that government spending should not increase any more.
The indicator for this should be economic growth. A reform of the stability pact is currently being discussed in Brussels. Federal Minister of Finance Christian Lindner recently outlined his ideas, which also provide for simplification and greater binding force.
The demands of the CDU go even further. In the future, compliance with the debt requirements will be monitored “by an independent authority instead of the EU Commission”. The Commission has long been accused in Berlin of being too soft. For example, years ago there was a proposal to entrust the ESM with budgetary surveillance. But there was never a majority for this in the EU.
More: “There’s going to be a big debate” – Lindner paves the way for the European debt debate.