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ECB stymied on debt crisis without fiscal union
Jens Weidmann, head of the Bundesbank and the ECB's dominant governor, said that any move to leverage Europe's €440bn rescue fund through central bank financing would be a "clear violation" of the ECB's legal mandate. He said Article 123 of the EU Treaty imposed a legal "prohibition on monetary financing", implying that the ECB cannot attempt to shore up the debt markets of Italy and Spain for covert fiscal support. Mr Weidmann said Germany learned the bitter lesson under the Weimar Republic that funding public debt "via the money printing press" leads to hyperinflation and disaster. The comments came a day after ... (full story)