The issue of helicopter money has been haunting the European Central Bank lately. The Finance Ministry of Germany, however, denied reports that they will consider taking legal actions if the allegations are true against ECB.
Vitor Constancio, Vice President of ECB, and Chief Economist Peter Praet denied the allegations and said that the idea is not on their minds. Helicopter money, also known as free cash, is giving money to ordinary people to stimulate spending and inflation as per Hellenic Shipping News.
According to reports, ECB has been seen distributing money to citizens. A spokesperson for the German ministry said that ECB's independence is only limited within its framework and its legal mandate. The ministry, however, has denied reports of the German government considering legal actions.
Finance Minister Wolfgang Schaeuble criticized these actions by the ECB. He said that these moves will put Germany at a disadvantage to other countries in the Eurozone. Sigmar Gabriel, Germany's Economy Minister, added that the super low interest rates of ECB are making workers and pensioners even poorer.
As reported by Bloomberg, the president of the German Institute for economic Research and former ECB official, Marcel Fratzscher, said Germany is not different from any European country on the issue of scapegoating. He added that the issue is harmful to ECB for being accused publicly of doing something damaging.
According to Seattle Times, Germany has been constantly arguing about the low-interest rates of ECB and its impact on savings and retirement plans. This has been the constant issue since the bank made measures to prevent a breakup in the Eurozone in 2012.
Bavarian Finance Minister Markus Soeder said the policy of ECB on its monetary funds has been wrong and the government of Germany should demand for a change. Soeder added that the zero-interest policy that ECB is implementing is a threat to the assets of Germans that invested their money on savings accounts and life pensions.
