Welteke rates low interest

Interest rates in Europe are low enough to boost economic growth, says one of Europe's leading experts.

    The French and German finance ministers in deep discussion

    Ernst Welteke, a member of the European Central Bank’s council said on Monday:“The conditions are there for stronger growth.

    “I see no need to act at the moment,” said Welteke during a televised interview with Bloomberg.

    Interest rates were last month cut to 2 percent in the euro zone countries. That is the lowest in more than half a century.

    Weleteke’s comments mirror those made earlier by the ECB’s President Wim Duisenberg and Bank of Greece Governor Nikos Garganas.

    The ECB forecasts growth in the region of about 0.4 percent this year.

    Dissenters

    Still, some analysts believe the bank will need to take further action to boost economic activity in the 12-member region.

    Earlier this month, the European Commission predicted that growth would stagnate in the second and third quarters of this year.

    “Sooner or later they will cut rates,’’ as “their economic forecasts will prove to be too optimistic,” Lothar Hessler, deputy head of research at HSBC Trinkaus & Burkhardt KgaA in Dusseldorf, told Bloomberg News.

    SOURCE: Agencies


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