VALETTA, Malta (MNI) – The European Central Bank’s official
interest rates are “appropriate” and given moderate growth and
well-anchored inflation expectations, there is no pressure to change
them, ECB Governing Council member Michael Bonello said Monday.
However, “the ECB will always be alert to change the rates if need
be,” Bonello said.
The central bank of Malta, which Bonello heads, put out a statement
that said, “going forward the pace of recovery already stands to be
limited by the ongoing process of balance sheet adjustment by financial
institutions and households.” In that context, it noted the latest ECB
projections, “which point to a sluggish growth rate of 0.8% for the euro
area in 2010.”
Bonello observed that inflation was expected at 1.1% this year and
1.5% in 2011, well within the ECB’s price stability limit of close to
but below 2%. He noted that unemployment was expected to rise to nearly
11%.
The EMU economy is “still below its growth potential” and is
unlikely to return to pre-crisis growth rates without structural reforms
in the individual Eurozone economies, Bonello said.
With regard to Greece, he said the debt crisis there shows “the
wisdom of the rules” enshrined in the EU’s Stability and Growth Pact.
“We are seeing what happens when those rules are not implemented,” he
said.
[TOPICS: M$X$$$,M$$EC$,MGX$$$,MGX$$$,MT$$$$]
