FRANKFURT, Germany (AP) — Germany's central bank, the Bundesbank, has again stressed its skepticism toward proposed purchases of government bonds by the European Central Bank, despite signs Chancellor Angela Merkel is open to the plans.

The German national central bank said in its monthly report Monday that it continues to "critically assess" such purchases and that they would carry "substantial risks."

ECB President Mario Draghi said on Aug. 2 that the bank might make such purchases to lower the high interest yields faced by some governments, if those countries first applied for help from the eurozone's bailout fund. He noted that the Bundesbank was the sole dissenter to the plan.

The Bundesbank has only one seat on the ECB's 23-member governing council, but has added clout because it enjoys considerable public support among economists, legislators and the general public in Germany. Merkel, however, has sounded more open to the idea — she indicated during a trip to Canada last week that the ECB was in line with European governments in being willing to do everything possible to save the euro.

High borrowing costs on government bonds are threatening to ruin the finances of Spain and Italy, which are struggling to control their debts while their economies are in recession. If the borrowing costs stick at a high level — many market-watchers put that at 7 percent — a country would find it increasingly difficult to maintain its bond repayments and would have to turn to the other eurozone countries and the IMF for assistance. Because Italy's and Spain's economies are so large — the third and fourth largest in the eurozone — many analysts are worried that a request for a bailout would stretch the eurozone's finances to breaking point and plunge the region further into recession.

Bond purchases could drive down those costs, though an earlier, limited ECB bond purchase program failed to decisively lower them.

Spain's economy minister, Luis de Guindos, over the weekend said the ECB should make purchases without setting any limit.

The ECB said however in a statement that it was "wrong" to speculate on the shape of future ECB interventions. It said its policies remained independent of governments and that it would act "strictly" within its mandate, which stresses preserving price stability as the first priority.

Top ECB official Joerg Asmussen, a member of the bank's six-member executive board, said in an interview that the bank's mandate is to control inflation but also includes keeping the euro from breaking up. Continued...