BERLIN (MNI) – ECB Governing Council member Ewald Nowotny said
Monday that he sees no inflation danger in the Eurozone for the
foreseeable future, and added that the real problem is weak economic
growth.
Speaking at a conference in Berlin, the Austrian central bank
governor said he was astonished that there was, especially in Germany,
“so much hysteria” about inflation risks.
“[Inflation] is really not the problem we have,” Nowotny said. “We
have a problem of too-slow growth, unfortunately, but we do not have in
the foreseeable future a problem of inflation.”
There is no inflation pressure either from the monetary or the
economic side, Nowotny said. “The ECB is in full control of monetary
developments,” he added.
Moreover, “we are still in a situation of a very weak economy with
a lot of excess capacity in the industry, so also from this side [there
is] no factor for inflationary fears,” he argued.
The central banker again showed himself unconcerned about the
recent euro drop. “We are absolutely in a normal [fx rate] range,”
Nowotny remarked, adding that there is “no specific reason for any
special hysteria.”
There exists currently “no euro problem, but a problem of fiscal
deficits in a number of countries,” he asserted. A reduction of these
deficits is “absolutely necessary,” he stressed.
Speaking to journalists at the sidelines of the conference, Nowotny
said CDS markets needed more transparency and stiffer regulation. “I
don’t see a [possible] closure [of CDS markets], but this is an ongoing
process,” he added.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
[TOPICS: M$X$$$,M$G$$$,M$$EC$,MT$$$$,MGX$$$,MFX$$$,M$$CR$]
