| BERLIN, Sept 10
BERLIN, Sept 10 Germans expressed shock and fear
about the direction of euro zone policy on Saturday after their
top official at the European Central Bank resigned over a
conflict over the bank's response to the debt crisis.
The resignation of ECB chief economist Juergen Stark, a
member of Angela Merkel's conservatives, is also a major blow to
the Chancellor who has been deserted by several top allies and
this month faces a vote on expanding the euro zone bailout fund
which could even cost her job.
"The end of the ECB as we knew it," a headline in the
Financial Times Deutschland stated baldly.
"Now it is over once and for all. The phase in the history
of the ECB which was moulded by the Bundesbank," wrote
commentator Wolfgang Proissl.
Germans, whose sacred Bundesbank was a model for the ECB and
whose strong economy has underpinned the euro zone since it was
created, fear they have lost the argument for stability to
southern nations, who they view as financially irresponsible.
Those fears have been compounded by the fact Frenchman
Jean-Claude Trichet will be replaced at the helm of the ECB by
an Italian, Mario Draghi, in November.
Above all, there has been anger about the ECB's decision to
buy Greek, Portuguese, Irish and now Italian and Spanish bonds
to help tackle the debt crisis, a move Merkel tacitly approved
That was the main reason Stark, known as a hawk at the ECB,
quit, sources said.
Former Bundesbank President Axel Weber, who had been front
runner to succeed Trichet at the ECB, resigned in protest at the
same policy in February.
"Stark held the same view of the bond-buying as Axel Weber
and the current Bundesbank president," said Manfred Neumann,
emeritus economics professor at Bonn University and former
thesis adviser to Bundesbank chief Jens Weidmann.
"It is a position that all the Germans have. This is a sign
of huge problems within the central bank. The Germans clearly
have a problem with the direction of the ECB."
Germans fear the policy is part of a move to a "transfer
union" and goes against the original treaty which forbids euro
zone states from taking on the debts of other members.
In a visceral comment in the Frankfurter Allgemeine Zeitung,
Holger Stelzner described the "sad evolution of monetary policy"
and accused the ECB of acting on bond markets to save failed
governments and Italy, which refused to cut spending.
"By buying government bonds, the ECB was itself helping to
turn monetary union into a debt community with unlimited
liability," he wrote. He also described the hardening of
northern and southern camps in the ECB and accused southern
states of "switching on the printing presses to iron out the
shortcomings of fiscal policy."
In a reflection of just how worried Germans are about that
policy and the euro zone crisis in general, even German
President Christian Wulff last month criticised the ECB's bond
buying policy -- a highly unusual foray into financial policy.
A poll for broadcaster ZDF this week showed that 76 percent
of Germans opposed granting any further aid to Greece.
All this could be very dangerous for Merkel.
Some commentators believe Stark's move will embolden rebels
in Sept. 29's vote on the European Financial Stability Facility
Although Merkel will win the vote because opposition parties
support the planned law, her authority would be badly damaged if
she fails to secure a majority from within her own centre-right
coalition and she may be forced to call elections.
Bild newspaper said former Bundesbanker Edgar Meister had
attacked Merkel's government for failing to give Stark
sufficient support -- echoes of criticism she faced after
(Reporting By Madeline Chambers, editing by Mike Peacock)