| Headline: We’re not listening Source: Euromoney Date: May 2001 Author: Anja Helk
ECB president Wim Duisenberg replied saying he “heard, but didn’t listen” to those demands. So interest rates were left unchanged at 4.75% on the meetings on April 11 and 26 – against analysts’ predictions of a 25 basis point cut. Duisenberg’s remark might be seen as the latest in a line of diplomatic gaffes. But this time he has a point. Even if he did agree on the need to cut rates to counter economic slowdown, he could hardly act on it. The ECB has a clear mandate, as stipulated in the Maastricht treaty, to deliver stable prices. “The ECB could never argue in the way the Fed did in justifying its most recent rate cuts, by citing markets and the economy,” president of the Bundesbank, Ernst Welteke, told a press conference on April 25. | |||||||||||||||||||||||||||||||||||||||||