FRANKFURT (MNI) – European Central Bank Governing Council member
Nout Wellink highlighted his concern over short-term inflation
developments and said he would be prepared to consider hiking the ECB’s
key refinancing rate in the coming months.
“This is not an equilibrium rate,” the head of the Dutch central
bank said in an interview published in the Wall Street Journal on
Tuesday.
“This is really an interest rate that at a certain moment starts to
distort the economic and financial process,” he said. “This reason in
itself is a good enough reason to increase, at a certain moment, your
policy rate.”
“I do worry about short-term developments” on inflation, Wellink
said. “The overall picture is not a picture I like very much.”
Wellink also called for the gradual winding down of the ECB’s
bond-buying program and said national governments should pick up
the slack through the expanded use of the European Stability Mechanism.
Wellink said he was opposed to the issuance of common eurobonds,
calling it a “rather in-transparent way of subsidizing other countries.”
“Let’s not create a transfer union, because that is not a union
that will be supported by a number of countries,” he said.
Wellink said he was not “campaigning” to succeed ECB President
Jean-Claude Trichet when the latter retires in October and called talk
in the markets that he was among a list of potential candidates
“speculation”.
— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —
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