COLOGNE, Germany (MNI) – The European Central Bank is withdrawing
its non-standard measures as market conditions allow, ECB Executive
Board member Juergen Stark said Monday.
The central bank sees at present neither inflationary nor
deflationary dangers in the Eurozone, the ECB’s chief economist told an
audience at a dinner here organized by the Economic Council of the
Christian Democratic Union in North Rhine-Westphalia.
“We will withdraw the measures as soon as the situation in the
markets allows us to do so,” the central banker said.
In a city famous for its jovial carnival celebrations, Stark
sounded a somewhat upbeat tone on recent financial market developments:
“We see a certain normalization in financial markets. Confidence is
increasingly returning.”
But, he cautioned that the “crisis is not over” and that
“uncertainty is still high.”
Stark spoke on the first trading day after Ireland announced that
it would seek assistance from its European partners and the IMF to
relieve budgetary problems and shortfalls in its banking sector.
Financial markets initially welcomed Ireland’s decision to apply
for financial assistance. By the end of the European trading day,
however, the mood had turned, as the junior party in Ireland’s governing
coalition, the Greens, called for early elections and Moody’s threatened
a multi-notch downgrade in Irish paper.
Stark reminded, however, that any aid to the embattled country
would carry “strict conditions” and warned against comparing the Irish
and the Greek situations.
Asked whether the Federal Reserve is engaged in an inflationary
policy, Stark said he saw “no change” in the central bank’s
price-stability orientation.
–Frankfurt bureau, +49-69-720142, tbuell@marketnews.com
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