TOKYO (MNI) – The Germany economy will likely see a sideways trend
in the second half of this year, European Central Bank Governing Council
member Jens Weidmann told reporters on Friday at the annual meetings of
the International Monetary Fund and World Bank Group.
“For the winter half we expect a sideway trend for the economy,”
Weidmann said. While the German economy remains “robust,” it
“increasingly feels pressure” from weak global economic developments,
the head of the Bundesbank observed.
The global economy continues to face significant risks, Weidmann
said, citing the fiscal cliff in the U.S., tensions emanating from the
Eurozone debt crisis and high energy prices. Still, “there is no reason
to be overly pessimistic.”
As for the Eurozone, Weidmann said that “the message (to) these
(IMF) meetings is that the adjustment progress in the Eurozone has
started successfully.” Still, he cautioned that the rebalancing process
remains at an early stage.
He warned of an “increasing reliance on monetary policy” to solve
fiscal problems not only in the eurozone but also in other countries
including Japan. “The causes of the crisis can only be solved by
governments,” Weidmann said.
Central banks across the globe have already conducted significant
monetary easing and further measures “can be counterproductive at a time
of slow fiscal adjustments,” he cautioned.
–Frankfurt bureau tel.: +49-69-720 142 Email: jtreeck@mni-new.com
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