"Confidence in German public finances is a key anchor of stability in the current crisis but it cannot be taken for granted," the Bundesbank said in a monthly report cited by the Washington Post. The central bank cautioned against the potentially "unlimited" financial support being considered for troubled Italy and Spain.
The Bundesbank also stiffened its resistance to a European Central Bank plan to buy billions of euros worth of Spanish and Italian government bonds to reduce those countries' crippling borrowing costs, Reuters reported.
The ECB is being forced to take a greater role in fighting the euro zone crisis while the national governments negotiate legal and political hurdles to coordinating a longer-term response, but the Bundesbank wants to limit central bank action.
The ECB sought to quash speculation about the form of the new bond-buying plans as the Bundesbank kept up its opposition, even after German Chancellor Angela Merkel voiced support for the ECB's crisis-fighting strategy last week.
The powerful central bank of Europe's largest economy objects to ECB President Mario Draghi's plan to resume buying bonds on the grounds that this amounts to monetary financing of governments, contravening European law.
"The Bundesbank remains critical of the purchase of euro system sovereign bonds, which comes with considerable risks for stability," the Bundesbank said in the introduction of its monthly report, reflecting the views of its leadership.
"Decisions about a possible broader mutualization of solvency risks should be ... with the governments and parliaments, and should not occur via central bank balances."
European leaders, many of whom set the euro crisis aside for their annual summer vacations, plan new rounds of talks this week over yet another rescue of Greece, the possible need to bail out Spain, a restructuring of Europe's banking system and a possible move by the European Central Bank to resume buying the bonds of distressed nations.
Greece's leaders need to decide on some $15 billion in new cuts or other measures to meet the requirements of the latest international bailout program, which is now months behind schedule because of their political stalemate and deepening recession. Spain's leaders, meanwhile, urged the ECB to prepare a forceful new round of bond buying to ensure that their country and perhaps Italy are not locked out of markets, as happened with Greece, Ireland and Portugal.