–ECB’s Downward Forecast Revisions Don’t Change Need For Consolidation
FRANKFURT (MNI) – The recent easing of financial market pressure
must not result in a corresponding easing of the pressure on Eurozone
governments to keep up reforms, European Central Bank Executive Board
member Joerg Asmussen said Thursday.
“What is important now is that we do not lose momentum,” Asmussen
said in a speech at a conference on interest rate policy here, warning
of a tendency for reform pressure to ease along with reduced market
pressure.
Asmussen cited “concrete, measurable progress” in peripheral
Eurozone economies, including in Greece, despite extremely tough
economic conditions. But he warned there remains “more to do,” and said
the downward revision of the ECB’s growth forecasts released earlier
Thursday only “strengthen my convictions” in the need for reforms.
“These problems must be addressed now, even if there is short-term
pain,” Asmussen said.
Asmussen also stressed there were “no signs” of medium-term
inflation risks, urging his audience to differentiate between increases
in central bank liquidity and the degree of credit supply to the real
economy. He argued both supply and demand for bank credit remained
restrained.
Asmussen also reiterated that the ECB’s OMT bond-buying program was
designed to remove fears of a Eurozone break-up, but not to completely
remove interest rate differentials within the Eurozone.
“We only want to take the foreign exchange risk out of the market,”
Asmussen said.
— Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com —
[TOPICS: M$X$$$,M$$EC$,MGX$$$,MT$$$$,M$$CR$]
