Merkel not to back expanded role for ECB

German chancellor Angela Merkel is likely to dismiss pleas to support an expansion of the role of the European Central Bank to help resolve the debt issue, as she pushes for closer economic ties in Europe. 

In the days before a speech to German lawmakers tomorrow she will spell out her stance for a 9 December  European summit. Merkel has repeatedly called for reworking EU rules to allow budget monitoring and enforcement and insulation of the ECB from political interference.

Analysts say this risks a showdown with fellow EU leaders and will widen her conflict with financial markets seeking immediate remedial action to end the contagion. 

Merkel's hard stance on the ECB is seen as a rebuff to President Barack Obama who called on European leaders to step up action to combat the crisis.

The chancellor remains opposed to following the policies of the Federal Reserve and the Bank of England, which to her, amounts to fighting debt with more debt. 

Analysts say a role for the ECB in battling the crisis would end up undermining the central bank's independence. It might also prove counterproductive and destroy the bank's credibility, they add.