Brussels, 13/06/2001 (Agence Europe) - Otmar Issing, Chief Economist at the European Central Bank (ECB) referred on Tuesday to concerns within the Frankfurt institution at the combination of an inflationist thrust and a slowdown in economic activity in the euro zone. Mr. Issing told the press that "intervention is part of the arsenal of a central bank", while stipulating that "it is used first and spoken about later". This statement, according to certain experts, would open the door to an intervention by the bank on its main leading rates. The signal, sent out to the markets, most likely helped the euro climb back over the 0.85 dollar mark on Wednesday.
Inflation, which stood at 2.9% in April, exceeded the maximum threshold of 2% set by the ECB. According to Issing, price rises are mainly due to the high level of the price of oil, the cost of imports linked to the weakness of the euro and the consequences - widely underestimated - of the food crises of the past few months in Europe (BSE, foot-and-mouth…)
The next meeting of the Governing Council of the ECB is scheduled for 21 June and will be followed by a press conference.