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17 Apr 2013
Weidmann opens the door to an ECB rate cut and foresees a lost decade in Europe
FXstreet.com (San Francisco) - Jens Weidmann, the Bundesbank’s president, has affirmed that the European Central Bank could cut its interest rates if economic data continues worsening, according to an interview published by WSJ.
Market has been speculating about the possibilities of the ECB cutting rates and now with inflation below the 2.0% it seems more than probably in May or June. However, Weidmann said the ECB “might adjust in response to new information," but he doesn’t “think that the monetary policy stance is the key issue."
"A point that I think is important to make, perhaps less for my central bank colleagues than for finance ministers,” Weidmann pointed, “is that the medication monetary policy makers administer only cures the symptoms and that it comes with side-effects and risks."
The important thing, according to Weidmann, is the development in the reforms at the national and European level.
The Bundesbank president also states that the European recovery will take as much as a decade. The opinion is contrary on other Europ leaders who said that the worst of the crisis is over. “"Overcoming the crisis and the crisis effects will remain a challenge over the next decade,” Weidmann affirmed.
Market has been speculating about the possibilities of the ECB cutting rates and now with inflation below the 2.0% it seems more than probably in May or June. However, Weidmann said the ECB “might adjust in response to new information," but he doesn’t “think that the monetary policy stance is the key issue."
"A point that I think is important to make, perhaps less for my central bank colleagues than for finance ministers,” Weidmann pointed, “is that the medication monetary policy makers administer only cures the symptoms and that it comes with side-effects and risks."
The important thing, according to Weidmann, is the development in the reforms at the national and European level.
The Bundesbank president also states that the European recovery will take as much as a decade. The opinion is contrary on other Europ leaders who said that the worst of the crisis is over. “"Overcoming the crisis and the crisis effects will remain a challenge over the next decade,” Weidmann affirmed.