The European Central Bank (ECB) could consider withdrawing the measures for granting emergency loans introduced to facilitate the exit from the financial crisis as early as the first quarter of next year, said ECB Governing Council member Axel Weber, as reported by European media on Friday.
"I think discussions about the abolition of these measures will mainly take place in the first quarter," Weber, also the head of the German central bank Bundesbank, said in an interview with Bloomberg television on Thursday in Frankfurt. Weber, a member of the ECB Governing Council that decides on the monetary policy of the bank, is considered the most likely successor to the current ECB leader Jean-Claude Trichet, whose term expires next year."It is clear that we need to initiate the normalization process," emphasized Weber. In his comments regarding the duration of the measures for issuing emergency loans to banks in the region, Weber went a step further than Trichet, stating that they should continue at least until the end of the year.
However, Weber’s comments suggest that the ECB believes that the eurozone, after Germany led the strongest growth in that 16-member region since 2006 in the second quarter, is managing well with the debt crisis. In contrast, the U.S. Federal Reserve was forced to announce new measures to stimulate the struggling U.S. economy this month. Weber also stated that the ECB is likely to raise its earlier growth forecast for the eurozone next month. The bank had projected a growth of 1 percent for the eurozone this year and 1.2 percent for next year in June. He emphasized that there are no signs of rising inflation and indicated that the key ECB interest rate is likely to remain at the record low of 1 percent for some time longer. (H)
