Bundesbank chief tells conference ECB cannot solve eurozone crisis

The European Central Bank cannot solve the eurozone crisis, Bundesbank chief Jens Weidmann told economists yesterday, pressing the bloc’s governments to get their economies in shape and tighten their fiscal rules.

Weidmann was addressing an economists’ conference in Aix-en-Provence, southern France, only three days after the ECB broke with precedent by declaring that it intends to keep interest rates at record lows for an extended period and may yet cut further in response to turbulence caused by the US Federal Reserve’s plan to slow monetary stimulus.

“Monetary policy has already done a lot to absorb the economic consequences of the crisis, but it cannot solve the crisis,” Weidmann said in his speech, which was released to the media in advance. “This is the consensus of the Governing Council. The crisis has laid bare structural shortcomings. As such, they require structural solutions.”