ECB Bini Smaghi: Mustn’t Overreact To Current Inflation Rise

Author: Market News International | Category: News

BERLIN (MNI) – The European Central Bank will do what is necessary
to bring inflation back below 2% over the medium term but must be
attentive not to overreact, ECB Executive Board member Lorenzo Bini
Smaghi said in a radio interview aired Tuesday.

“We will do whatever is needed to maintain inflation low,” Bini
Smaghi told Austria’s ORF radio. “Of course, it’s a medium-term
objective, so we have to avoid overreaction,” he stressed.

Commenting on Greece’s debt woes, the central banker repeated that
the country “has no alternative” but to implement the fiscal
consolidation and structural reform program agreed with the EU and the
IMF.

Any attempt to restructure the country’s debt will mean that its
“economy will still be weak,” Bini Smaghi said in the interview.

He also rejected criticism that the current reform efforts are in
effect worsening Greece’s economic problems. “Any successful program has
to be frontloaded, so you need to take the hard measures at the
beginning,” he argued.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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