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Germany must not be isolated: ECB's Nowotny
VIENNA (Reuters) - A split between the Bundesbank and the rest of the European Central Bank's decisionmakers must not become permanent, Austrian ECB policymaker Ewald Nowotny said after the German central bank chief was the sole dissenting voice in last week's vote by the ECB's governing council to buy state bonds.
Nowotny told Austrian ORF radio that the Bundesbank's chief Jens Weidmann had taken part "very constructively" in discussions at last Thursday's meeting, when the ECB decided it could buy potentially unlimited quantities of bonds from euro zone countries requesting a bailout.
"I hold it to be very important that Germany not be isolated. Therefore such a voting result should certainly not become a permanent state of affairs," he said in an interview broadcast this weekend.
"This was a special situation but I think it shouldn't become the norm," he said. "I would also not over-dramatize the whole thing. The president of the German Bundesbank also took part very constructively in the discussion."
The ECB's decision provoked an outcry from conservative press and lawmakers in Germany, the economically strongest member of the euro zone, who accused the bank of writing a "blank cheque" to indebted southern states.
Chancellor Angela Merkel has given her tacit support to the plan but is taking a hard line on conditions countries must meet to continue to receive financial backing - in particular Greece, which wants to delay repayments and prioritize growth.
Austria, one of Germany's closest allies, again made the case on Sunday for Greece to be given more time to meet the terms of the bailout, provided it sticks to reforms and public spending cuts it has agreed with international lenders.
"If they do that - and the troika (of inspectors from the lenders) will verify that by October - then we should give them room to breathe," Social Democrat Chancellor Werner Faymann said in an interview published in the Oesterreich newspaper.
"That means more time to pay back their credits, so that they can invest again," he said, in his clearest statement so far of support for Greece.
Merkel visited Vienna last week, and the two leaders emphasized their close ties and agreement on major issues.
The so-called troika of inspectors from the International Monetary Fund, European Commission and European Central Bank are assessing Greece's progress towards targets set under its bailout before deciding whether to go ahead and hand over a further 31 billion euros ($40 billion) in loans.
(Reporting by Georgina Prodhan; Editing by Greg Mahlich)
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