Dutch bank pushes mortgage credit, ECB restraint

Klaas Knot, president of De Nederlandsche Bank (DNB), is against European Central Bank (ECB) president Mario Draghi's plans to turn on the money printing press. He also thinks that the Netherlands should further reduce mortgage tax credit.

Knot has serious concerns about ECB's plans to turn on the printing press. He will only agree to the plans under strict conditions, Knot said in an interview with the Volkskrant. "It is the politics that has to decide on the allocations of budgetary risks within the eurozone. Not us. They are elected representatives and administrators, we are technocrats... As long as European politics is not willing to share the risks in the euro are, it is not appropriate for us to make such a decision via the back door."

With this statement Knot agrees with the skeptics in the ECB management, the faction who does not want the ECB to buy state obligations on large scale from euro countries. A majority of the ECB management is emphatically for buying the obligations. A decision will likely be made on January 22nd, the date of the next board meeting.

Regarding the mortgage tax credit, Knot thinks the Netherlands should reduce it further. The Cabinet is currently building incrementally on the credit, but the next government after 2017 must do more. "The Cabinet has taken many good steps, but it is not enough."

This year the government decided to gradually reduce the maximum deduction rate in the coming years from 52 to 38 percent. The deduction was reduced to 51.5 percent this year and will be reduced to 51 percent next year.

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