– ECB Acting Within Mandate, Should Not Change Mandate

HAMBURG, Germany (MNI) – The European Central Bank will present
details on its new bond-buying program following its Governing Council
meeting on September 6, ECB Executive Board member Joerg Asmussen said
Monday.

“On how exactly we will do this, I will ask for patience until
September 6,” Asmussen said when asked about the potential scope of new
bond market interventions. It will take another few days to work out a
program that everyone will be satisfied with, he explained.

A recent media report citing ECB sources and suggesting that the
ECB will wait until Germany’s Constitutional Court ruling on September
12 before announcing details had raised concerns that the central bank
may not deliver on September 6.

While Asmussen was not ready to give details of the discussion, he
reminded that ECB President Mario Draghi “did not say that bond buys
will be limited.”

The German board member dismissed concerns that the ECB’s decision
to link market interventions to prior political action could undermine
its independence further.

“There is still a clear separation. A program that a county has
with the EFSF is not a sufficient condition” for ECB intervention, he
said. “In the end, the Governing Council will decide if, when and how it
will intervene.”

“The ECB is acting clearly within its mandate,” Asmussen stressed,
adding that he would “warn against debate over ECB’s mandate.”

On the upcoming ruling of the German Constitutional Court on the
legality of the Eurozone’s permanent bailout fund ESM, Asmussen said he
was not inclined to give advice to another independent institution.

However, he said his personal view was that rapid implementation of
the ESM would be key, as it is a stronger crisis-fighting instrument
than the EFSF.

Should the court ruling be negative, this would not automatically
mean that the permanent bailout fund is dead, Asmussen ventured, arguing
that depending on the details of the ruling an adjustment to its design
might be sufficient.

–Frankfurt newsroom +49 69 72 01 42; e-mail jtreeck@mni-news.com

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