Brussels, 19/04/2001 (Agence Europe) - If the decision taken on Wednesday by the American Federal Reserve to lower its interest rates is of a nature to increase pressure on the European Central Bank (ECB) for its to follow suit, it is improbable that this would be enough to shift its monetary rigour, felt a source close to the ECB, on Thursday. "Reacting to the American decision, more remarkable for its effect of surprise than truly surprising, would be a negative signal sent by the European bank as to its ability to maintain its independence, felt this source.
Most analysts doubt that the ECB will lower its rates during its next meeting, on 26 April, despite the increasing pressure recently brought to bear on the "guardians of the Euro". The President of the Eurogroup, Didier Reynders, let it be known in an interview with the German daily Boersen-Zeitung that he is not satisfied with the ECB's monetary policy. Mr Reynders, who had already invited the Bank to assume its responsibilities regarding monetary policy (see EUROPE of 12 April, p.14), specified that he plans to discuss the matter with central bankers during the informal Ecofin Council in Malmö, to be held next Friday and Saturday. On Wednesday, IMF Director General Horst Koehler urged the ECB to lower its rates (see EUROPE of 19 April, p.14) and one French diplomat said on Thursday that the ECB should give a signal by the month of May.
On Wednesday, in an unusual manner after a meeting by video conference, the Federal Reserve lowered its short term interest rates by 50 base points, which brings its key rate to 4.75%. The president of the German central bank, Ernst Welteke, member of the ECB, justified this decision because of persisting inflationary risks, noting that European economic growth remains above 2% despite the slowdown in the world economy.