14 May 2003, 16:57  Mer hints ECB should cut rates to boost growth

PARIS, May 14 - French Finance Minister Francis Mer said on Wednesday the euro currency's rise against the U.S. dollar was bad news for European Union growth and gave a broad hint that it may be time for the European Central bank to cut rates. Asked about the strength of the euro, Mer told an economists' conference in Paris: "The consequences for the European economy are not very favourable in terms of growth."
A strong euro makes European exports more expensive in dollar terms. Mer said businesses should take advantage of these tough conditions to work on improving their productivity. However, he hinted that a bit of help from the ECB would not be unwelcome. "The inflation risks now being largely behind us, there is room for monetary manoeuvre," he said. "It is perhaps time, and considered timely by our main central bankers, to use it in an intelligent manner." The ECB kept rates unchanged at its last meeting on May 8, disappointing markets that had hoped a soaring euro and dire economic data might entice it into a rate cut.//

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