TOKYO (MNI) – European Central Bank governing council member
Christian Noyer defended the E85 billion financial rescue aid by the
European Union and the International Monetary Fund for the debt-laden
Ireland, expressing confidence in containing any risk of contagion of
sovereign problems in the region, the Nikkei reported Monday.
“With the powerful program, Irish banks will regain trust and
unease among their depositors and clients will ease,” Noyer was quoted
as saying in an interview with the Nikkei.
“The case of Ireland is very unique and there is no other country
in the region that is suffering from similar difficulties,” he said.
Noyer said that the ECB introduced an unorthodox program to buy
sovereign debt issued by member countries in a bid to help resolve the
malfunction of credit markets in the region, adding that the ECB will
maintain this program “at least until the end of the January-March
quarter of 2011,” according to the business daily.
Noyer, who is also the Banque de France governor, ruled out the
risk of a double-dip recession in the euro-zone economy.
“The recovery may lose traction due partly to waning effects of
fiscal stimulus. Still I have a reasonably bright outlook for the
region, given signs of a pickup in domestic demand in some countries
including Germany,” Noyer said.
On foreign exchange issues, Noyer said the euro is still
over-bought in terms of effective exchange rates while that the single
currency is still holding above the debut level of $1.17 seen in January
1999.
Noyer also noted that the yen is roughly in line with appropriate
levels based on the past trend and effective exchange rates, adding that
“we also need to take note of the relative strength of the Japanese
industry’s competitiveness and deflation.”
tokyo@marketnews.com
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