FRANKFURT (MNI) – The next three-year long-term refinancing
operation of the European Central Bank will doubtless be of high
interest for financial institutions, German Bundesbank board member
Joachim Nagel said in an interview released Wednesday.
Nagel told German television station DAF that “the additional
three-year operation will certainly again prove attractive.” The LTRO —
to take place in the latter half of this month — follows the first such
operation on December 21, which took up E489 billion.
Portugal, whose spreads most recently rose sharply, has the
advantage of national consensus about the need for fiscal consolidation,
Nagel observed. “And the markets will perceive that and turn back in the
other direction.”
Nagel dismissed the idea of central bank participation in a Greek
debt restructuring: “It is a private sector involvement, not a public
sector involvement.”
Inflation in the euro area will return to under the ECB’s
price-stability threshold of 2%, he said. The ECB’s mandate will thus be
fulfilled this year “at any rate.”
Nagel challenged the IMF’s weak German growth forecast, conceding
the slowdown but calling it “not as negative” as seen by the IMF.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
[TOPICS: M$X$$$,M$$EC$,MT$$$$,M$G$$$,M$$CR$,MGX$$$]
