AMSTERDAM (MktNews) - Bundesbank Vice President Juergen Stark Monday would not comment directly on the European Central Bank's (ECB) decision to leave the refi minimum bid rate unchanged last week, but did say that "the Bundesbank still expects solid growth" this year in the eurozone.
Speaking on the sidelines of a conference here, Stark said there are "signs of slowdown" in Germany and that growth "would be within the range of potential growth" this year.
Germany's growth potential is 2.0-2.5%, GDP rose 3.0% last year.
However, "we should not exaggerate the dangers" to German growth, Stark said, noting that tax reforms will help keep consumption at high levels in the months ahead.
The Berlin government has stuck by its forecast for German growth of 2.75% this year, although Finance Minister Hans Eichel has said that the forecast reflects a 2.675-2.825% range and that GDP would likely come in at the lower end of that range.
Stark also said that the ECB is not necessarily "behind the curve" on monetary policy, because signs are not yet clear enough that the ECB should be going one way or the other. The ECB is "not paralyzed," even though there are clear differences within the Governing Council.
Stark added that there was no reason for the ECB to change its price stability target -- currently defined as a medium-term price ceiling of 2% -- as this is the best way to contribute to future growth and employment and added that there is no need for the ECB to make its decision-making structure more transparent.