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Reports: ECB policymakers split over stimulus measures

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Reports: ECB policymakers split over stimulus measures

Some policymakers at the European Central Bank have publicly criticized the stimulus package recently unveiled by outgoing President Mario Draghi, with one official suggesting that the measures could be reversed once Christine Lagarde takes over in November, Reuters and Bloomberg News reported.

In a bid to shore up a flagging eurozone economy, the ECB on Sept. 12 cut its deposit facility rate deeper into negative territory and announced that it will restart quantitative easing, with purchases of €20 billion of debt a month. The asset repurchase program will begin Nov. 1 and is expected to run "for as long as necessary" and end "shortly" before the central bank begins hiking interest rates.

Deutsche Bundesbank President Jens Weidmann, who has long been seen as one of the ECB's hawkish members, voiced opposition to the measures, telling German paper Bild in an interview that economic conditions in the eurozone had not yet deteriorated enough to warrant an "excessive" stimulus package, according to the reports.

De Nederlandsche Bank NV President Klaas Knot cast doubt on the effectiveness of the relaunched asset purchase program, Bloomberg said, while Oesterreichische Nationalbank Governor Robert Holzmann said QE could be a mistake that could be reversed once Lagarde takes over from Draghi as ECB president Nov. 1.

Meanwhile, other members of the rate-setting Governing Council voiced more positive views of the ECB's stimulus package.

Suomen Pankki Governor Olli Rehn told Bloomberg in an interview Sept. 13 that the ECB's "highly accommodative" policy stance was a response to a shortfall in inflation and is aimed at sustaining European job creation and growth. Rehn also called for unity among his colleagues, saying that they "have normal debates within the Governing Council and it's important we will retain unity in public appearances."

Separately, Latvijas Banka head Ilmārs Rimšēvičs told Bloomberg that the ECB is well-prepared for quantitative easing, and that he would be in favor of purchasing more government bonds if needed.