FRANKFURT (AFX) - Bundesbank central council member Christian Milow said the European Central Bank probably failed to meet its stability targets last year.
Milow, who is also central bank president in the federal state of Saxony and Thuringia, said in a speech that the rate of price increases, based on the Harmonised Index of Consumer Prices for the euro zone, has breached the 2 pct ceiling about a year ago and was at 2.9 pct last November.
"The ECB probably has failed to meet its stability goals on the average of the year 2000," Milow said.
"Nevertheless, I think this should not be a cause for criticism. The monetary policy of the euro system is oriented on the medium term and the ECB should not let itself get worked up over short-term breaches of the 2 pct upper limit, particularly if the reason was outside of the central bank's sphere of influence," he added. He said in the past weeks, the price trend seemed to have reversed in the international oil markets.
"I'm confident that the easing will also filter down to the price increase rates in the winter months," he added.
Milow also noted that the 30 pct fall in the euro's value from its Jan 1, 1999 rate against the U.S. dollar should not be "dramatised" because the euro two years ago was anyway "highly overvalued".