ZURICH, Switzerland (MNI) – The German economy is expected to grow
by 2.5% in 2011 and reach the pre-crisis output level by the end of the
year, European Governing Council member Axel Weber said Wednesday.
The comments indicate that the Bundesbank has hiked its previous
growth projection of 2.0%.
Although Germany’s recovery has been exceptionally strong, “by now
economic stimulus should no longer play role in most countries,” Weber
noted.
Earlier this week, ECB Executive Board member Juergen Stark also
argued that the “economic recovery in the euro area is increasingly
self-sustaining and increasingly less dependent on state support
measures.”
In devising new rules for the Eurozone, solidarity should not be
overstretched, Weber said.
“We cannot change the rules in the middle of the game,” Weber said.
Instead, responsibility for addressing public debt problems should lie
primarily with countries in trouble.
Speaking at the University of Zurich, Weber insisted that “there is
no crisis of the euro. The euro is one of the most stable currencies in
the world.”
Weber said that he is “absolutely convinced that there will be no
default of a Eurozone member state.” Going forward, however, the common
currency region needs a mechanism that allows for involvement of the
private sector should tax money be used to support a member state.
Weber did not address the hot topic of the Eurozone’s inflation
outlook but observed that emerging markets are facing “extreme” price
pressure.
–Frankfurt bureau, +49-173-6529-331; jtreeck@marketnews.com
[TOPICS: M$$EC$,M$X$$$,M$G$$$,M$$CR$]
