As I wrote two months ago in my critique of the ECB's liquidity policies (Eurointelligence, 24.02.2011)

The idea that sovereign bond purchases need to be "sterilised" to prevent inflation illustrates that the ECB has a very peculiar concept of sovereign debt, in contrast to its idea of private debt. Consider the ECB's own covered bond ("Pfandbrief") programme. In May 2009, the ECB decided to buy up to €60bn of asset-backed bonds issued by Eurozone commercial banks, without much protest. A year later the mere suggestion that the ECB might purchase a comparable amount of sovereign debt was, and continues to be, met with hysteria. Some ECB council members went so far as to claim that secondary market purchases of sovereign bonds were prohibited by the Treaty - which is not true. The constituent rules of the eurozone appear to be based on the bizarre idea that sovereign debt is toxic until such time as it has been sanitized by going through the bid-offer spread of a major investment bank, while privately-issued covered bonds are pristine, even at issue.

Here "some ECB council members" refers to Axel Weber and Jürgen Stark, and the hysteria is almost exclusively to be found among the German chattering classes.

Economics is politics by other means

Weidmann ascends to the throne

The new central banker made it clear in his first speech that he will not deviate from the Bundesbank's stability culture.

Now get this:

While acknowledging that financial stability had become an important aim for central banks after the crisis he stressed that the primary goal remained prize stability. "On this point there must not be any compromises for central banks", he stressed.

Economics is politics by other means