* Conservative media, some Merkel MPs slam ECB bond-buying
* Eurosceptic lawmakers mull fresh legal action
* Merkel allies say ECB acting within mandate
* German public wants to halt bailouts - opinion poll
By Gareth Jones and Stephen Brown
BERLIN, Sept 7 Germany's conservative press
accused the European Central Bank on Friday of writing a "blank
cheque" to indebted euro zone states by agreeing to buy their
bonds, and some pro-government lawmakers threatened legal action
to stop the purchases.
ECB President Mario Draghi unveiled plans on Thursday for
potentially unlimited purchases of bonds of up to three years
maturity of countries that request a European bailout and fulfil
strict policy conditions. The German central bank chief was the
sole dissenting voice in the decision.
Chancellor Angela Merkel has given her tacit support for the
plans, saying they buy time for vulnerable states such as Spain
and Italy to implement tough reforms.
But the outcry from a small but vocal eurosceptic minority
of her own centre-right MPs and from influential conservative
media underlined the political risks for her as the euro crisis
builds ahead of a general election one year from now.
"Blank cheque for the indebted states," was the headline of
the top-selling Bild tabloid, a harsh critic of the bailouts for
Greece and other struggling euro zone nations, adding that the
ECB move could make the euro "kaputt".
"Draghi sets off Germany's alarm bell," was the headline in
the conservative daily Die Welt.
An opinion poll released on Thursday showed nearly one in
two Germans has little or no confidence in the Italian Draghi.
Many German conservatives share the concern of Jens
Weidmann, head of the Bundesbank, that the bond-buying plans
violate a taboo on financing deficits, remove pressure on
governments to reform and will eventually stoke inflation.
Several MPs vowed legal action to block the plans.
"We should consider making legal checks on whether the ECB
has hugely overstepped its mandate. I am convinced that this is
the case," Klaus-Peter Willsch, a leading eurosceptic member of
Merkel's Christian Democrats (CDU), told German radio.
"As the largest credit nation in the whole game Germany
should have a right of veto (in the ECB)," he added.
Weidmann was isolated in Thursday's meeting of the ECB
Governing Council, where mighty Germany, with 82 million people
and Europe's biggest economy, has just one vote like tiny Malta.
In a critical statement, the Bundesbank said the decision
was "tantamount to financing governments by printing banknotes".
Investors cheered the ECB rescue plan, with the euro and
stocks rising worldwide and the borrowing costs of Spain and
Italy tumbling. Die Welt headlined the market reaction bitterly
"Financial markets cheer the death of the Bundesbank."
Frank Schaeffler, from Merkel's junior coalition partner the
Free Democrats, said Germany should file a lawsuit with the
European Court of Justice, saying the ECB was in danger of
turning into a "bad bank for all the junk debt of Europe".
The rank-and-file of Merkel's coalition still support her
stance in the euro crisis of offering help to struggling
countries on condition that they implement tough measures to put
their public finances in order and improve competitiveness.
"As long as there is conditionality, it is okay," deputy CDU
floor leader Michael Fuchs told Reuters, arguing that the ECB
was still acting within its mandate.
Speaking in Stockholm on Friday, Finance Minister Wolfgang
Schaeuble contradicted Weidmann, saying the bond buying plans
did not mark the start of monetary financing of sovereign debt.
He dismissed the media outcry as exaggerated.
In Berlin, Merkel's spokesman Steffen Seibert said the ECB
had acted independently and within the framework of its mandate
in taking its decisions.
But lawmakers are keeping a nervous eye on opinion polls
that show rising public opposition to bailouts in Germany, where
fear of hyper-inflation is deeply engrained in the national
A poll published on Spiegel Online on Friday showed 54
percent of Germans wanting the country's Constitutional Court to
block the euro zone's permanent rescue fund, the European
Stability Mechanism (ESM). Twenty five percent want it approved.
The court's ruling, eagerly awaited by financial markets, is
scheduled for next Wednesday. Legal experts polled by Reuters
expect the court to approve the ESM but set conditions limiting
Berlin's future flexibility.
Business daily Handelsblatt, which often voices concern at
the financial burden of the bailouts on German taxpayers and
companies, drew a link between the ECB's latest plans and the
pending court ruling, and criticised the "democratic deficit of
the euro rescuers".
The conservative Frankfurter Allgemeine Zeitung, a megaphone
for Germany's monetary hawks, said "the border between monetary
and fiscal policy has been blurred" and called the argument that
bond-buying was within the ECB's mandate "far-fetched".
A study by R+V Insurance released on Thursday showed 73
percent of Germans fear the costs for taxpayers of the euro debt
crisis and 65 percent see the continued existence of the common
currency under threat.
(Additional reporting by Chris Cottrell, writing by Gareth
Jones; Editing by Paul Taylor)