European Central Bank Executive Board member Juergen Stark is quitting his post.
According to the bank ,the German policymaker is stepping down for personal reasons. But sources have told media organisations that it is because Stark disagrees with the ECB’s controversial recent buying of government bonds of countries like Italy and Spain to hold down their borrowing costs in the euro zone debt crisis.
Stark’s departure is a severe blow to the ECB, whose president, Jean-Claude Trichet, this week defended the bank’s buying of the debt of troubled economies on the bond markets.
Stark is the second German policymaker to leave the bank this year after Bundesbank chief Axel Weber quit in February — a move also spurred by his opposition to the bond programme.
“This is remarkable,” said Manfred Neumann, emeritus economics professor at Bonn University and former thesis adviser to Bundesbank President Jens Weidmann.
“Stark held the same view of the bond-buying as Axel Weber and the current Bundesbank president. It is a position that all the Germans have. This is a sign of huge problems within the central bank. The Germans clearly have a problem with the direction of the ECB.”
Stark and Weidmann, together with two other members of the ECB’s 23-member Governing Council, opposed the revival of ECB’s bond-buying last month.
The news that Stark will resign comes amid sharp criticism of the ECB’s actions by some economists and politicians in his native Germany.