Germany’s board member at the European Central Bank said quantitative easing isn’t the right choice for the euro zone at present, hardening a split among policymakers on how to respond to slowing inflation.

“A consideration of the costs and benefits, and the opportunities and risks, of a broad purchase programme of government bonds does not give a positive outcome,” Sabine Lautenschlaeger, one of the ECB’s six-member executive board, said in Berlin.

“There are very few shared competencies in fiscal policy. As long as this is the case, the ECB’s purchase of government securities is inevitably linked to a serious incentive problem.”

The comments suggest she and Bundesbank president Jens Weidmann are united against ECB president Mario Draghi’s push toward expanding stimulus to measures that might require purchases of sovereign bonds.

Other known sceptics on his 24-member governing council include the Dutch and Austrian central bank governors. The officials meet this week to discuss the matter before a monetary policy decision on Thursday.

The ECB’s policymakers are divided on how to react to weakening price pressures and the threat that they might derail economic growth and become a self-fulfilling spiral of deflation. Euro zone inflation slowed to 0.3 per cent in November, far below the ECB’s goal of just under 2 per cent.

With ECB interest rate cuts exhausted and purchases of covered bonds and asset-backed securities already under way, Mr Draghi explicitly cited buying government bonds as a possible measure when he spoke to European lawmakers on November 17th. – Bloomberg