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Merkel Rips the Fed for Deepening Crisis
German chancellor says central banks have made economy worse
By Jason Farago
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Posted Jun 3, 09 6:46 AM CDT
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(Newser)
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World leaders rarely criticize central banks in public, but yesterday Angela Merkel laid into the Fed, the European Central Bank, and other institutions for deepening the global economic crisis. In a tough speech, the German chancellor claimed that the banks were too powerful, had acted too aggressively, and, in the case of the relatively prudent ECB, had "bowed somewhat to international pressure." Their actions "must be reversed," Merkel said.
As the Wall Street Journal reports, Merkel's highly unusual intervention suggests that the German government—with its long memories of Weimar-era hyperinflation—remains anxious about whether the Fed and ECB can mop up the hundreds of billions in liquidity they have pumped into world markets. The banks' actions, she warned, were only laying the groundwork for another crisis: "We will be in exactly the same situation in 10 years' time."