Brussels, 14/01/2009
Economic activity is falling off a cliff: inflation has crashed through the 2% floor of price stability while unemployment is rising significantly across all European countries. On top of all of this comes the danger of a renewed appreciation of the euro exchange rate, generating yet another blow to economic activity and employment in Europe.
Therefore, the only sensible thing for the ECB to do at its meeting on Thursday this week is to continue the policy of interest rates cuts and cut them to the bone.
ETUC Deputy General Secretary Reiner Hoffmann emphasises that: ‘It is extremely dangerous to put forward the argument that interest rates cannot be cut because it would be difficult to increase them in the future at a time when the economy is facing the worst recession in many decades. The European economy should not be sacrificed because the ECB’s internal decision procedure of unanimity consensus is malfunctioning’.