FRANKFURT, Jan 16 (Reuters) - Europe must abandon the idea that printing money, or quantitative easing, can be used to address the euro zone debt crisis, Bundesbank board member Carl-Ludwig Thiele said on Monday.

Thiele called for euro zone countries to exercise fiscal discipline and said that boosting the resources of Europe's rescue funds would buy time to address the bloc's debt woes.

"But lasting confidence cannot be bought with money alone," he added in the text of a speech for delivery in Hamburg.

"One idea should be brushed aside once and for all - namely the idea of printing the required money. Because that would threaten the most important foundation for a stable currency: the independence of a price stability orientated central bank."

Thiele said the ECB's decision in May 2010 to buy Greek sovereign bond was a breach of a ban on monetary state financing in the euro zone.

He added that he believed the ECB's decision last August to extend its bond-purchase programme to Italy and Spain was driven by a majority view on the ECB Governing Council that the cost of borrowing was too high for the Italian and Spanish governments.

Bundesbank President Jens Weidmann also opposes the ECB's bond-buying programme, which he feels takes the central bank into the real of fiscal policy.

However, ECB figures released earlier on Monday showed the central bank more than trippled its bond purchases last week to the highest level since late November, spending 3.77 billion euros as a calm start to the New Year gave way to an intensification of the euro zone debt crisis. (Writing by Paul Carrel; editing by Ron Askew)

2012-01-16 19:51:52




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