The rise in national debt as a result of the pandemic should not be seen as a threat to the independence of the European Central Bank, said board member Isabel Schnabel in one of the most important German newspapers.
“The pandemic is driving up national debt worldwide,” she wrote in an opinion piece for the Frankfurter Allgemeine Zeitung published by the ECB on Saturday. “In Germany in particular, many observers are concerned about this development. They see this as a threat to the independence of the European Central Bank. ”
The German politician herself urged that strong fiscal support in the euro area actually “strengthen the effectiveness of monetary policy and reduce the long-term costs of the pandemic”. Over the past week several of her colleagues have warned against withdrawing government incentives too soon and creating a “cliff effect” that leaves companies and workers vulnerable.
Targeted, future-oriented government investments “can promote sustainable growth, increase long-term competitiveness and facilitate the necessary reduction in the debt ratio after the crisis has been overcome,” said Schnabel. “This would also give the ECB more room for maneuver in the future, which would even strengthen its independence.”