Germany’s Finance Minister to ECB: we’re doing our bit to fight inflation

BERLIN (Reuters) – The European Central Bank must not worry about Germany’s budget when making policy to fight inflation in the euro zone, German Finance Minister Christian Lindner said on Friday, presenting plans to return to national debt brake rules in 2023.

Lindner said the 2023 draft budget, marked by consolidation efforts, meant the ECB would not have to worry about “fiscal dominance” – when ECB independence risks being compromised by the high cost of servicing governments’ sovereign debt.

“We want to send a clear signal with this budget: we are doing our homework,” Lindner told reporters.

Of the ECB, he added: “It does not have to take the (German) federal budget into account when fighting inflation because we … are reducing our deficit and returning to the debt brake.”

The debt brake rule, temporarily suspended due to costs associated with the coronavirus pandemic, limits new borrowing to a tiny fraction of economic output.

(Reporting by Miranda Murray and Paul Carrel)