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ECB will not set rates to suit troubled members-Weber
27 January 2010 @ 13:34

FRANKFURT (Reuters) - The European Central Bank will not set euro zone interest rates to suit the bloc's few troubled members, Governing Council member Axel Weber said on Wednesday.

"We have to do monetary policy for the (monetary) union as a whole... we cannot take into our decisions developments in certain parts," Weber told broadcaster CNBC in an interview in Davos.

He also kept up the tough European rhetoric towards Greece, saying it had no option but to meet its promise to slash its budget deficit.

Weber, who heads Germany's Bundesbank, added that euro zone growth was expected to be around 1.5 percent next year and said that there were no signs on the horizon of a worrying surge in inflation.

Addressing U.S. President Obama's plans to cut the size of banking giants and force them to split off their more risky trading activities, Weber said he was cautious about splitting banks but welcomed the other measures.

Source: Reuters



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1 Comments

Moraira Property said:
28 January 2010 @ 11:00

Proof, if proof were needed, of the fundamental flaw in the one size fits all policy of the Euro. This single currency may work reasonably during relatively begin economic conditions. The economic discipline it brings has some merit.
However, it is clear that the member states in Euro zone do not represent a single economically homogenous block. France and Germany seem to have recovered from this astonishing recession remarkably quickly. The same cannot be said for Spain, Greece, Portugal, or Ireland. How can their best interests be served by interest rate policy which does not suit their particular place in the economic cycle?



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