FRANKFURT (MktNews) - European Central Bank (ECB) Chief Economist Otmar Issing Thursday appeared to signal that a rate cut could come sooner than now generally expected, pointing to a clear slowdown in growth and receding inflationary risks in the 12-nation euro area. Speaking at an event sponsored by Dresdner Bank, Issing opened his remarks by dismissing market rumors that the ECB Governing Council was convening an emergency session. "I don't want to give the impression that we are panicking or are in a crisis situation," he said. Market rumors to the contrary were "pure nonsense." Issing said there was "no question" that the ECB's internal staff projections for eurozone GDP growth this year were now lower than the 2.6-3.6% range published in December, given global economic developments in the interim. In particular, the global economic outlook had "clearly darkened" since the end of last year, with the United States and Japan now facing a "much worse" situation. Repeating remarks made in an interview with the Wall Street Journal Europe published Thursday morning, Issing said he was "convinced" that if eurozone GDP growth came in "near" potential growth (the ECB has pegged this at 2-2.5%) this would be "not bad news, but good news ... and proof of robust growth." Issing, however, again qualified the impact of the U.S. slowdown on European growth, arguing that it would be limited because the eurozone is a relatively closed economy. In that regard, Issing reminded his audience that it is not the ECB's job to fine-tune its policy, ultimately, the eurozone can see a rise in potential growth, but this will require hard work in other policy areas, especially an intensification of ongoing structural reform efforts. In the final analysis, the state of the EMU economy hinges mainly on domestic factors and "what the Europeans do themselves." The ECB for its part, he said, had a "clear mandate" to preserve price stability and most not "take responsibility for factors it does not have the instruments to deal with." Turning to current price developments in Europe Issing said it was "important to note that the ECB has clearly said in recent months that price risks are now clearly more balanced" than they were at the end of 2000. He also played down the importance of HICP rates for individual months, thereby implying that current levels above 2% need not hinder the ECB from cutting rates. "They (headline HICP rates for individual months) may be psychologically important, but they are meaningless for monetary policy" because they are essentially backward looking, Issing argued. "What is decisive, are the prices for tomorrow," he said, adding that he was "confident" that HICP would "gradually" fall below 2% and thereby ensure price stability in the medium term. "This is what is valid for monetary policy," he said. Issing again argued that current HICP levels well above 2% were the result of the feed-through from sharp rises in oil prices and the euro's weakness in the past and that those "temporary" factors were now being compounded by the fall out from higher meat prices caused by the BSE and foot-and-mouth epidemics. He said it was "obvious" that the ECB could not control such temporary sources of inflationary pressure. If nothing new develops on the price front in the absence of new price shocks, HICP is certain to recede, not least given base effects, Issing said. Although the central banker conceded that this "will take time" he also argued that a further rise in core HICP "is not to be expected... on the contrary."