The ECB as a Fed Clone?

From today's Open Europe news summary:

Mats Persson: Topping up bailout fund through ECB could prove to be “non-starter”
In an opinion piece in today’s CityAM, Open Europe’s Director Mats Persson writes that despite the positive news that eurozone leaders are now acknowledging that a Greek default might be necessary and the importance of recapitalising Europe’s banks, the alleged proposal for a new eurozone rescue package, based on leveraging the European Financial Stability Facility (EFSF) through the balance sheet of the European Central Bank (ECB), is a non-starter. He argues that: “the plan would require a radical reworking of the EFSF framework, since it is not designed to be leveraged or be subordinate to the ECB in terms of covering losses [and] using the ECB’s balance sheet to top up the EFSF would further expose the former to even more risky debt”. He notes that under the proposals “the ECB would fully enter the domain of fiscal policy”, which would be unacceptable to Germans. He argues that “a growing number of Germans now view the ECB with growing suspicion, as was seen in the dramatic resignation last month of Juergen Stark, the German representative on the ECB’s executive board, allegedly over the bank’s decision to start buying Italian and Spanish government bonds. One step further, and German support for the entire euro project could start to diminish.”


German finance minister Wolfgang Schäuble denied that a fivefold increase in the EFSF was imminent saying, “No, that is clear... We do not intend to increase it,” reports CityAM. Schäuble’s comments were echoed by a number of German politicians. Carsten Schneider, the SDP’s Finance spokesman said: "A new multi-trillion programme is being cooked up in Washington and Brussels, while the wool is being pulled over the eyes of Bundestag and German public. This is unacceptable."

The "programme..being cooked up in Washington and Brussels" is to turn the European Central Bank into a clone of the Federal Reserve Bank, a last-resort purchaser of worthless sovereign debt. Those who control the money control everything; thusly, turning the ECB into a European Fed would constitute a vast transfer of real power to Brussels.