Strasbourgh, July 03: European Central Bank (ECB) president Wim Duisenberg has put an end to hopes for early interest rate cuts, saying the central bank had done its part to boost growth and it was now up to governments. Duisenberg’s sharp words provided a direct answer to German chancellor Gerhard Schroeder who on Tuesday said the ECB “must answer the question of whether they have already done enough.”

“Governments can no longer hide behind the ECB to cover up their failure to enact the structural reforms that are so urgently required,” Duisenberg told the European Parliament.
The ECB’s aggressive rate cuts over the past two years, which have brought interest rates to historical lows of 2%, make monetary policy appropriate and right, he said. Schroeder’s appeal to the ECB came only days after he reached a tax cut deal that threatens to throw his country into budget problems with the EU.
“Let me be crystal clear, the current monetary policy stance in the eyes of the Governing Council with interest rates at 2% is regarded as being appropriate in the light of the developments we foresee for the medium-term future,” he said. Bureau Report