Weakening Euro Causes Worry
Monday March 8
FRANKFURT, Germany (AP) -- The influential chief of Germany's central bank warned in a newspaper interview published Monday that continuing political demands could harm the euro.
The remarks appeared aimed at Germany's left-leaning finance minister, Oskar Lafontaine, who has persistently called on the European Central Bank to lower interest rates to stimulate growth.
Bundesbank President Hans Tietmeyer warned that such continued policy demands will actually make it more difficult for the central bank to adjust interest rates.
''The more intensely these discussions are led in public, the less scope it leaves for monetary decisions,'' Tietmeyer was quoted
by Handelsblatt as saying.
The ECB decided to maintain its key interest rate, set at 3 percent, at its regular, biweekly meeting last Thursday.
Tietmeyer, who as head of the Bundesbank sits on the European Central Bank's advisory board, said monetary policymakers don't want the euro to remain weak against the dollar. The euro has hovered around $1.08 for the last week, down some 7 percent from its Jan. 1 launch.
A weak euro, he said, risks sinking confidence within the 11 countries that adopted the euro and outside of the euro bloc. |
