FRANKFURT (MktNews) - The following is a summary of the main comments made by Bundesbank President Ernst Welteke, a member of the European Central Bank's policy-making Governing Council, in an interview with Market News International on Friday, July 13. Please see additional stories for details.

ON INTEREST RATES:

--Said rates are now "appropriate" and will remain so at least till the next ECB Council meeting on July 19, when they will be reviewed again, as they are every two weeks.
--But said he sees no short-term change in the outlook for eurozone price stability, implying rates could be on hold for some time longer.
--Said the current level of real interest rates is "not high" and does not pose a brake on economic growth.
ON THE EURO:
--Said he doesn't see the current fx rate as a price stability threat. But ECB will continue to watch closely under its 2nd policy pillar.
--Said the ECB has no fx target. He did not use the word "intervention" as such but said there is no need at present for any sort of central bank action against the exchange rates set by the markets.
--Said the euro is "clearly" undervalued and has a "relatively high" potential to appreciate. Its current level is a market "overreaction."
--Said the dollar poses a greater global economic risk than the euro.
--Said there was no difference in view on G3 exchange rates between Bank of England Governor Eddie George and ECB President Wim Duisenberg.
--Acknowledged the potential for a sharp correction to current forex misalignment but said he saw no danger for now.
ON HICP INFLATION AND PRICE DEVELOPMENTS:
--Said "not sure" if trend change towards lower HICP rates will be seen in June. HICP may not fall further until September, as base effects. Said ECB needs "some more data" to judge if price trend change near.
--Said the main risk to medium-term price stability is the possibility of second-round inflation effects via excessive wages. Said he still has "no reason" to believe this will happen, but wages in Germany, Spain and the Netherlands must be closely watched.
ON ECONOMIC GROWTH:
--Said 2001 EMU growth was more likely to be at the lower end of the 2.0-2.5% range of potential growth than at the upper end.
--Said growth should begin to pick up gradually in H2, when there should be a "slight upward trend," as there are several "positive" factors.
--Said that while Germany's economy is still in the doldrums due to the struggling construction and automobile sectors, it could see a pick-up as inflation falls and domestic demand strengthens.
--Said he was "somewhat optimistic" on U.S. H2 recovery chances on the back of "aggressive" rate cuts and tax cut. This would benefit Europe.
--Said he saw no contagion risk emanating from Argentina or Turkey.
ON MONEY SUPPLY AND CREDIT DEVELOPMENTS:
--Said he saw no risk to price stability from monetary developments, despite the third straight acceleration in M3 growth in May.