German ECB Policy-Setter Breaks Ranks with Draghi over QE

A rare public rift emerged at the core of the European Central Bank on Monday as a key policy-setter said she opposed an extension of money printing, days after the bank’s head paved the way for more stimulus.

There have long been differing views on the bank’s 25-member Governing Council, which sets interest rates. But Sabine Lautenschlaeger’s blunt public opposition is unusual because the German sits on the six-person Executive Board, which is the nucleus of policy-setting and tends to present a united front.

ECB President Mario Draghi outlined on Friday how the bank’s scheme of quantitative easing to buy chiefly state bonds was helping the economy and pledged to do more if needed.

But on Monday, Lautenschlaeger broke with normal etiquette to publicly criticise this stance, saying that ever looser monetary policy had its limits and that money printing had yet to stabilise sinking price inflation, its formal goal.

“I don’t see any reason for further monetary policy measures, especially not for an extension of the (asset) purchase programme,” she said, ten days ahead of a meeting at which policymakers will set the ECB’s course.


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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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