German Laschet trusts ECB to control inflation By Reuters

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© Reuters. Christian Democratic Union (CDU) candidate for chancellor Armin Laschet holds a press conference in Berlin, Germany, September 13, 2021. REUTERS / Michele Tantussi

FRANKFURT (Reuters) -Armin Laschet, the Tory candidate who claims to succeed German Chancellor Angela Merkel in this month’s election, has said he is confident the European Central Bank (ECB) will manage to stabilize prices, because the acceleration of inflation hits savers.

“For me, it’s alarming when small savings, pensions, life insurance and mortgage contracts lose value,” Laschet told the weekly Welt am Sonntag (WamS).

“I am sure that the ECB will particularly fulfill its main mission of monetary stability … But it also means that when interest rates rise again, the debt burden becomes an even bigger problem for the state”, a- he said in the Saturday edition.

Laschet’s remarks a week before the September 26 general election contrast with the comments of his key expert on fiscal and economic policies Friedrich Merz, who this week blasted the ECB’s lax monetary policy.

The ECB announced this month that it will reduce emergency bond purchases in the next quarter, marking a first small step towards the unwinding of the emergency aid that has supported the zone’s economy. euro during the coronavirus pandemic.

This year, the ECB is counting on inflation of 2.2%, above its 2% target, before falling to 1.7% in 2022 and 1.5% in 2023.

The latest German election poll, provided by Ipsos, puts the conservative CDU / CSU bloc at 21% and the Social Democrats (SPD) at 27%, putting pressure on Laschet to close the gap.

In an attack on his main opponent, the candidate Social Democratic chancellor and finance minister Olaf Scholz, Laschet has stepped up his criticism of a money laundering investigation which involved raids on Scholz’s ministry.

Earlier this month, German prosecutors raided the Financial Intelligence Unit, an agency of the Ministry of Finance, highlighting Germany’s failures in the fight against financial crime.

Shortly after the raids, Scholz – who is also vice-chancellor – expressed frustration with the way the investigation had been handled by prosecutors.

“It breaks a political taboo when the vice-chancellor questions the independence of the attorney general following a descent into his ministry,” Laschet told WamS.

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