ECB Urges More Stimulus Measures

Emergency growth-stimulating policies are still needed to support continental Europe’s fragile economic recovery, even though Germany and France have emerged from recession, a top European Central Bank policymaker has warned. Axel Weber, Germany’s Bundesbank president, made it clear he would not rush to withdraw the extensive measures taken by governments and the ECB – which he said had helped the recent improvement in economic performance in Germany, the Financial Times reported. The ECB has slashed official interest rates to a record low of 1 per cent and pumped hundreds of billions of euros of extra liquidity into the banking system. Governing council members – of which Mr Weber is considered among the more “hawkish” – have stressed the ease with which such measures could be reversed. But Mr Weber’s comments suggest the ECB will wait for firm signs of a broad-based and sustainable recovery before implementing any “exit strategy”. Read more. (Subscription required.)