European Central Bank council member Axel Weber said the bank will raise interest rates if needed to curb inflation in the 15 nations sharing the euro, even as a global credit squeeze threatens to damp economic growth. While the current benchmark rate of 4 percent is helping to contain inflation, the ECB ``will act'' if its price-stability goal is threatened, Weber said in a speech in Luxembourg today. He pointed to a host of ``upside'' inflation risks and said price pressures are ``alarming.'' The euro jumped on the comments, rising as high as $1.5818. Inflation in the euro region accelerated to 3.3 percent in February, the fastest pace in 14 years. The ECB has refrained from following the U.S. Federal Reserve in lowering borrowing costs to bolster economic growth, arguing it is more concerned about inflation and Europe's economy is sound. Weber said economic growth in the euro area, while ``moderating,'' is ``fundamentally robust.'' Economic expansion and ``strong'' money-supply growth pose ``continued upside risks to price stability in the medium term,'' he said. The ECB aims to keep inflation just below 2 percent. Weber, who head's Germany's Bundesbank, acknowledged some downside risks to growth are materializing. Expansion in Germany, Europe's largest economy, will fall short of the Bundesbank's December forecast of 1.6 percent for 2008, he said, citing the euro's appreciation, record oil prices and financial-market turmoil. At the same time, Weber warned against ``growth pessimism'' and said Germany is ``well positioned'' to profit from continued global expansion. German ``exports are surprisingly robust despite the development of oil prices and the exchange rate,'' Weber told delegates at the German-Luxembourg Economic Conference. http://www.bloomberg.com/apps/news?pid=20601087&sid=ak8VrqJ.30LE&refer=home Ha, ha, ha...Weber...funny guy...
in a few years the headline might read Weber says ECB is 'surprised' by announcements from Spain, France and Ireland that they are pulling out of the euro
You're not kidding. It's certainly being talked about seriously in Spain and Italy. The ECB cares only about Germany. I understand that Germany has the lion's share of data and GDP. But it doesn't have the majority of human population.