ECB: Draghi vs Weidmann

It seems that nationalities have a great impact on the ECB’s policymakers. The central bank meets tomorrow, but Italian central banker Mario Draghi, the ECB President, and German Jens Weidmann who heads Bundesbank have quite different opinions on how the central bank should act in the current crisis.

Draghi pledged last week that the ECB would “do whatever it takes to preserve the euro.” The market’s speculating that Draghi proposes the central bank to restart bond purchases in order to lower the borrowing costs for the troubled euro zone nations.

Weidmann made clear he loathes such move as it, according to Bundesbank would risk violating the ECB charter's ban on central-bank funding of government debt.

Of course,   at first glance Weidmann is not a big force in the ECB's 23-member Governing council. However, WSJ experts say that But “boxing the Bundesbank into a corner could undermine Mr. Draghi's credibility” in Germany, the leading economy of the currency union.

Weidmann has already opposed the ECB decisions for several times. At the same time, he doesn’t have any allies. Some ECB officials claim that Bundesbank’s discord undermines the central bank’s efforts to overcome the crisis as this way the region’s monetary authorities seem uncertain in their actions.

For now, the compromise would be if on Thursday the ECB announces its intention to buy bonds and to take other measures, without yet implementing them.