Germany's Weidmann skeptical of ECB Policy

Bundesbank President Weidmann said in Zurich yesterday that the decision to purchase government bonds is a balance of risks.

On the one side is the risk of combining fiscal and monetary policy together with risks to financial stability that can result from very accommodative monetary policy.
 
On the other side, are the risks that can emerge from a period of lower inflation rates, which could end up in a self-perpetuating deflationary spiral.
 
Barclays notes in a report on Tuesday:

• The Bundesbank head said that low inflation was generally due to a decline in oil prices, which is temporary and that this is stimulating the economy.
• He again rejected concerns about a deflationary spiral of falling prices and wages, saying the risk of such a scenario playing out was "very low." He said that there weren't signs of especially low wage deals; rather wages are expected to rise both in his home country of Germany and in Spain. (WSJ)