Frankfurt / Rouen, 30/03/2001 (Agence Europe) - The European Central Bank (ECB) published a press release on Friday. It was intended to reassure markets, by justifying the decision it had taken the day before to keep its key interest rate unchanged at 4.75% (see yesterday's EUROPE, p.14). Recognising the fall in inflation and the slowdown of the European economy, it implicitly evokes the possibility of making its monetary policy more flexible. The ECB thus stated that "money growth has been on a downward trend since the spring of 2000, indicating that upward risks to price stability from the monetary side have receded". It also speaks of the "increased uncertainty about the global economy and its impact on the euro area". The ECB again warns trade unions that "wage developments need to be monitored carefully", mainly because of the secondary effects of the recent rise in oil prices.
The ECB press release was distributed by the presidents of the French and German central banks, Jean-Claude Trichet and Ernst Welteke, on the occasion of the meeting of the Franco-German Economic and Financial Council, on Friday in Rouen. During this meeting, the French and German finance ministers, Laurent Fabius and Hans Eichel, expressed reserved optimism about the prospects of the European economy. Both acknowledged the fact that Europe is going through an economy downturn, but they considered it far weaker than that in the United States.