FRANKFURT - THE European Central Bank's current efforts to boost the euro-zone economy go far enough unless the situation deteriorates markedly, ECB Governing Council member Axel Weber was quoted on Monday as saying.
DON'T EXAGGERATE ON GROWTH
Mr Weber said there were signs that the downward economic trend was easing in industrialised and developing countries, but they were still in a period of weakness and labour markets could worsen further.
'I really warn against overly exaggerating the signs of hope on financial markets and the signs of a calming in the economic cycle,' Mr Weber said.
In an interview with the Financial Times Deutschland, Mr Weber backed the ECB's moves to cut its main interest rate to 1 per cent and buy about 60 billion euros (S$120 billion) worth of covered bonds.
Some of the ECB's 22 policymakers have suggested the ECB could go further, but Mr Weber's comments made it clear he sees no need for expansion at the moment even though he warned against taking an overly optimistic view of the recovery.
'Unless things get noticeably worse, in my view, the package of measures decided until now is sufficient,' he was quoted as saying when asked if ECB's asset purchases would stop at covered bonds.
'We have to turn our primary attention in terms of monetary policy to letting the steps we have already undertaken take effect. There are still things in the pipeline.'
Mr Weber said the step exposed the ECB to only slim risks and the central bank had every intention of putting its pledge into action, with details to be announced in June.
Also, the 1 per cent level for the main refi rate was adequate and took into account a hefty downward revision in ECB staff projections, also due for release in June, he said.
The comments are the latest in a series of differing public statements about how far the ECB should go to support the recovery, although policymakers have denied any major split.
Mr Weber said the ECB's baseline scenario was for a weak economic recovery, no credit crunch and no deflationary spiral.
'We expect to have some months of negative inflation rates in summer, but toward the end of the year, inflation will rise again to levels of 1 percent of above,' he told the paper. -- THOMSON REUTERS
