EUROPEAN Central Bank (ECB) policymakers clashed Friday over what policy medicine to administer to the sickly eurozone economy, laying bare deep-seated tensions within the Governing Council.

    Bundesbank President Jens Weidmann said he saw no need for fiscal stimulus in Germany, rejecting a thinly veiled appeal from ECB President Mario Draghi for Berlin to increase its public investment levels to help support the eurozone.

    Germany, a strong advocate of fiscal austerity, has come under pressure from other countries including the United States, and finance officials around the globe to use its large current account surplus and budgetary room for manoeuvre to invest.

    Earlier, Draghi’s lieutenant at the ECB, Benoit Coeure, said governments could help counteract lower prices with “fiscal policy, when it is available without questioning long-term debt sustainability” — a cue for governments like Germany to invest.

    The discord between the hawkish Weidmann and policymakers closer to Draghi such as Coeure highlights deep divisions within the Council about how far the ECB should go to support the economy, and comes just as jittery markets look for reassurance.

    Weidmann brushed off the suggestion that more German public investment could help other eurozone economies, and also took aim at ECB plans to buy asset-backed securities, or bundled loans — a dig that a further ECB policymaker rejected.

    “The boost to the peripheral countries from an increase in German public investment is ... likely to be negligible,” Weidmann told a conference in Riga, where Coeure also spoke.

    (SD-Agencies)