BERLIN (MNI) – European Central Bank Executive Board member Joerg
Asmussen said Monday that the central bank’s bond purchasing program,
the OMT, will not lead to higher inflation in the Eurozone.
“The sovereign bond purchases of the OMT will not prompt an
inflationary trend,” Asmussen said at a tax consultants’ conference in
Hamburg.
“We’re also not firing up the printing presses, this is not
monetization of government debt,” he said, noting that purchases under
the OMT will be sterilized.
“According to our forecasts, inflation in the euro area will fall
again to below 2% next year,” Asmussen remarked. “What is even more
important…inflation expectations are anchored around our target level
of 2%,” he added.
The central banker vowed that the ECB will not inflate high
government debt away, instead “hard reforms” of the member states are
needed. Monetary policy cannot replace government action, he underlined.
Finding “a sustainable way out of the crisis is fully the job of
members states,” he insisted.
In that regard, Asmussen warned the member states not to weaken
their reform efforts when bond yields come down due to the OMT. While
the crisis countries had made progress in becoming more competitive,
more reforms were needed, he said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@mni-news.com
[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$$EC$,MT$$$$]
