FRANKFURT (AFX) - European Central Bank president Wim Duisenberg said the ECB currently has a "completely" neutral monetary policy stance, as concerns on inflation balance out worries about growth prospects. "I must say I am equally worried about inflation as I am for output prospects," Duisenberg said in the question and answer session of today's ECB news conference. "I am pleased the risks to inflation seem to be balanced but I am not so pleased the acceleration in output is taking so long to take hold," the Dutchman added.
Duisenberg said at the moment the ECB does not have any bias in its monetary policy. "We are completely neutral at this point," he said. Separately, Duisenberg also made clear the ECB's monetary policy would not be affected if Germany's deficit breaks the EU stability and growth pact by moving above 3 pct of GDP this year, as is expected by most economists.
"In no way would this affect the degree of freedom which the ECB has." But Duisenberg also expressed "satisfaction" the German government appears to be "sticking to its guns" over the importance of the stability and growth pact.He strongly reiterated the ECB does not want any changes to be made to the pact, despite calls from Italy and France for more flexibility.
"I hear the voices who want to change the rules of the game, but the ECB sticks by its message of don't change the rules of the game you have only just begun playing," said Duisenberg. The ECB president said he "takes great comfort" from the statement from heads of state from their last summit that they remain committed to balancing their budgets by 2004.//www.forexdirectory.ne