Brussels, 06/03/2001 (Agence Europe) - The President of the European Central Bank Wim Duisenberg stated on Monday, before the European Parliament's Economic and Monetary Affairs Committee, that the slowdown in growth in the United States will only have a limited impact on that of the Euro area, by justifying the ECB desire not to loosen its monetary policy, by leaving unchanged its reference rate at 4.75%. At the same time, Mr Duisenberg stated that the present uncertainties over world growth imply the need to strengthen the foundations of non-inflationary growth in Europe. The aim is to maintain price stability in the medium term and to reduce inflation, which was at 2.4% in January, to below the 2% ceiling set by the ECB, said Mr Duisenberg, who confirmed that the ECB expects to see inflation fall under this limit in the coming months. Even if the recent development have brought to the surface more balanced risks than those foreseen for price stability, the ECB still favours a policy of prudence, notably following the volatility of exchange rates and oil prices, asserted Mr Duisenberg. The ECB foresees that growth should approach 3% in the 2001-20022 period, he indicated, while adding that this rate could be maintained at this level beyond 2002, which would allow to forecast a period of robust growth followed by a fall in unemployment. Furthermore, the ECB President called on the Member States to act in the direction of wage moderation and to continue down the path of budgetary consolidation. In passing, he criticised the stability programmes of certain countries, which are not sufficiently ambitious, given that the reduction of fiscal pressure is not accompanied by appropriate restrictions in spending. Moreover, the stability programmes do not reflect the progress needed if they want to take on the long-term budgetary challenge, and carry out, in particular, the budgetary adjustments necessary in certain countries to tackle the ageing population.
In another tone, when raising the enlargement of the European Union, Wim Duisenberg added that, among the models examined for the ECB in an enlarged Union the formula with the rotation of members of the ECB Governing Council is most probable, in view of one day seeing the Euro zone functioning with more than 25 countries. At present, the ECB decision-making body has 18 members.