German finance minister's adviser calls for ECB aid conditions

The ECB's biggest shareholder, Germany's Bundesbank, laid out its conditions for providing fresh support to the eurozone's most indebted countries on Monday, after opposing such aid at an emergency meeting. In comments published in Der Spiegel magazine on Friday Lindner's economics adviser, Lars Feld urged the ECB to attach conditions to any aid in order to promote economic reforms.

European Central Bank (ECB) aid to tackle rising government debt yields in some eurozone countries should come with conditions, an adviser to German Finance Minister Christian Lindner said. The ECB's biggest shareholder, Germany's Bundesbank, laid out its conditions for providing fresh support to the euro zone's most indebted countries on Monday, after opposing such aid at an emergency meeting.

In comments published in Der Spiegel magazine on Friday Lindner's economics adviser, Lars Feld urged the ECB to attach conditions to any aid in order to promote economic reforms. "Anyone who wants money from the central bank out of turn must be prepared to provide something in return," Feld said.

The ECB decided at the June meeting to direct bond reinvestment to help eurozone countries on the bloc's southern rim and devise a new instrument to contain divergence in borrowing costs between them. Bundesbank chief Joachim Nagel, who disagreed with that decision according to sources at the meeting, warned against trying to decide the right market spread as that was "virtually impossible" and risked making governments complacent.

"This includes reforms supervised by independent institutions; anything else would endanger the stability of the monetary union," Feld was quoted as saying by Der Spiegel. Feld's comments are unusually prescriptive advice from a German government official on policy at the independent ECB.

Lindner, of the business-friendly Free Democrats (FDP), has repeatedly pressed the ECB to tackle rising prices, saying last month that it has a responsibility to do so.