ECB

Merkel challenger Steinbrueck takes aim at ECB low rates policy

Reuters News
|
Posted: Aug 06, 2013 12:09 PM
Merkel challenger Steinbrueck takes aim at ECB low rates policy

FRANKFURT (Reuters) - Chancellor Angela Merkel's main challenger in next month's German election criticised ECB President Mario Draghi's pledge to keep interest rates at record lows for an extended period, saying the move put savers in an "unspeakable situation".

In rare criticism of the independent European Central Bank by a leading German politician, Social Democrat Peer Steinbrueck said on Tuesday savers faced a creeping "expropriation" of their money by inflation that is running higher than interest rates.

"That is an unspeakable situation so I am very sceptical about Mario Draghi's move to announce such a low interest rate policy - almost a policy of zero interest rates - for the ECB for the coming years," Steinbrueck told Reuters in an interview.

Breaking with precedent, Draghi declared last month the ECB would keep interest rates at record lows for an extended period and may yet cut further, responding to turbulence caused by the U.S. Federal Reserve's exit plan from money-printing.

Steinbrueck, a former German finance minister, is fighting an uphill battle to oust Merkel in the September 22 election and has run a gaffe-prone campaign.

(Reporting by Edward Taylor and Kathrin Jones; Editing by Stephen Brown)