BERLIN, April 16: The German government denied a report on Friday that Chancellor Gerhard Schroeder planned to reprimand the Bundesbank for criticising government policy, saying relations with the central bank were good. German newspaper Welt am Sonntag said Schroeder planned to call Bundesbank chiefs to a meeting on Tuesday to express his displeasure with recent criticism from the central bank.

In an extract from an article released ahead of publication, the paper said Schroeder feels no other central bank in the euro zone has pursued such open opposition to government policy as the Bundesbank.

Government spokesman Bela Anda rejected the report, saying Tuesday’s meeting had been planned for months and was intended to be a basic discussion of economic policy.

“It is well known that there are good working relations between the government and the Bundesbank,” he said in a statement. “All other comments on alleged side issues at the meeting, as conveyed by Welt am Sonntag, are false.”

The Bundesbank could not be reached for comment.

The German central bank has criticised the government for running a budget deficit that has breached European Union borrowing limits for the past three years and which the European Commission believes will do so again this year.

Welt am Sonntag said Schroeder would tell the Bundesbank that its status as an independent central bank obliged it to stay out of questions of day-to-day politics.

If it could not agree to more restraint, the government may consider sanctions such as changing the central bank law to drastically reduce the size of the 10-member Bundesbank board, the paper said.

Welt am Sonntag said Schroeder would also request the Bundesbank to express more public support for government reforms of the labour market and social welfare system, instead of criticising the changes as inadequate.—Reuters