Germany's Finance Minister Wolfgang Schaeuble told a newspaper on Wednesday that European Central Bank chief Mario Draghi had been "overinterpreted" after suggesting that fiscal policy could play a greater role in promoting growth.
The comments, made last Friday have been widely seen as a shift of emphasis towards support for greater fiscal stimulus over austerity.
"I know Mario Draghi very well, I think he is being overinterpreted,"
"I know Mario Draghi very well, I think he is being overinterpreted," Schaeuble told the Passauer Neue Presse in an interview, adding he respected the independence of the central banker.
Draghi, speaking at a global central banking conference in Jackson Hole, Wyoming, said late on Friday the bank was prepared to respond with all its "available" tools should inflation drop further.
The prospect of more policy easing in Europe - and even the possibility of quantitative easing to pump cash into the financial system and revive inflation - saw the London stock market, closed on Monday for a public holiday, play catch up with an advance seen in Europe in the previous session.
Schaeuble also said he wasn't pleased about comments made by France's former economy minister Arnaud Montebourg on Germany's "obsession" with austerity but that this was a domestic debate in France and consequences had been drawn. French President Francois Hollande ejected Montebourg from his cabinet earlier this week.
The European Central Bank is prepared to respond with all its "available" tools should inflation in the euro zone drop further, ECB President Mario Draghi said on Friday in remarks that opened the door to possible policy action in September.
In stronger language than he has used in the past, Draghi stressed the central bank stands ready to do more.
Speaking at a global central banking conference in Jackson Hole, Wyoming, Draghi said he is confident that stimulus steps announced in June, helped by a weaker euro, will boost demand in the ailing economic bloc.
But in stronger language than he has used in the past, Draghi stressed the central bank stands ready to do more. Recent growth data confirmed the currency bloc's recovery remained "uniformly weak," he said, promising to keep the policy stance accommodative for an extended period of time.
"The (ECB's) governing council will acknowledge these developments and within its mandate will use all the available instruments needed to ensure price stability over the medium term," he said at a luncheon attended by many of the world's top central bankers including Federal Reserve Chair Janet Yellen.
"I am confident that the package of measures we announced in June will indeed provide the intended boost to demand, and we stand ready to adjust our policy stance further," he said.
"The governing council would use also unconventional instruments to safeguard the firm anchoring of inflation expectations over the medium- to long-term," he added.
The ECB's governing council will meet next in early September.
Draghi did not, however, offer a qualifier as he did in introductory remarks at his August news conference when he added: "... should it become necessary to further address risks of too prolonged a period of low inflation."
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