FRANKFURT (MNI) – Monetary policy cannot be used to solve problems
caused by poor fiscal policies, European Central Bank Executive Board
member Lorenzo Bini Smaghi said on Wednesday.
“These problems come from wrong fiscal policies in some countries.
This is a fiscal problem not a monetary problem,” Bini Smaghi said in
testimony to the European Parliament’s Economic and Monetary Affairs
Committee.
“Monetary policies cannot solve a fiscal problem,” he added. When
citizens do not trust the market, “that is something which is not a task
for the monetary policy authority.”
[TOPICS: M$$EC$,MT$$$$,M$X$$$,MGX$$$]
