ECB Stark: Must And Will Act Timely On Interest Rates: Press

FRANKFURT (MNI) – The European Central Bank must and will act in a
timely manner to raise interest rates when the time is right, European
Central Bank Executive Board member Juergen Stark said in an interview
released Friday.

It is dangerous to keep interest rates too low for too long, the
ECB’s chief economist told the German business magazine Capital.

Strong growth in developing countries could push prices upward in
Germany before the German economy has reached a stable path of growth,
“and this could mean stagflation,” Stark warned.

“It is dangerous to hold on to low interest rates for too long,” he
cautioned. “We must and will act at the right time.”

Stark indicated that he is “still skeptical” about a financial
contribution from the IMF to Greece, but he noted that it is “sensible”
to turn to the IMF for its expertise. “The IMF must accept the rules of
the currency union,” he insisted.

–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com

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