— Can Discuss Eurobonds, Not Time For Decisions Yet
FRANKFURT (MNI) – European Central Bank Governing Council member
Ewald Nowotny is concerned that the Eurozone may enter a prolonged
period of low growth and low inflation, he said in an interview with
Austria’s Wirtschaftsblatt published late on Wednesday.
Asked whether he is worried about inflation, Nowotny said that his
personal concerns go in a “different direction, a Japanese one.” Rather
than seeing inflationary pressures, he fears the economy may face a
“prolonged period of low growth rates and low inflation rates.”
“Already today we can see that the slowdown of economic growth had
an immediate impact on oil prices,” he said.
Following its latest monetary policy meeting earlier this month,
the ECB said it continues to see upside risks to price stability.
Following the recent economic slowdown, Governing Council member Yves
Mersch hinted that the ECB may soon change its assessment to describe
risks as balanced.
Nowotny said that while the Eurozone’s economic recovery may be
slowing, he does not expect to see a return of a recession.
The head of the Austrian National Bank also told the newspaper that
the Eurozone is not yet ready to make any decision on Eurobonds.
“There is certainly a discussion worth having in a serious manner
taking into account all advantages and disadvantages,” Nowotny said.
For now, however, implementing decisions made at the EU summit in
July should be the priority, he said.
“Other discussion can be held technically, but I do not think the
time is ripe for a decision on this question,” Nowotny said.
–Frankfurt bureau tel.: +49-69-720142. Email: jtreeck@marketnews.com
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