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  1. [verwijderd] 24 mei 2005 21:22
    OECD calls for rates cut in eurozone
    By Chris Giles, Economics Editor
    Published: May 24 2005 11:39 | Last updated: May 24 2005 11:39

    Pressure mounted on the European Central Bank on Tuesday to boost demand after the Organisation for Economic Co-operation and Development urged it to act immediately “by significantly cutting policy rates”.


    At the same time, the OECD called on the US to continue raising rates to contain inflationary pressures and to encourage savings.

    The Paris-based international organisation, charged with improving the economic prospects of advanced countries, said widely differing growth prospects across the eurozone and the global economy were threatening to slow world demand and hamper efforts to reduce current account imbalances.

    It called for a 0.5 percentage point reduction in eurozone interest rates.

    “It is of course a matter of central importance for the growth prospects of the countries involved but also, to some extent, for the credibility of the Economic and Monetary Union itself,” the editorial of the OECD's twice-yearly economic outlook said.

    Wolfgang Clement, Germany's economics and labour minister, supported the OECD's conclusions on Tuesday, joining Italian ministers in urging the ECB to loosen monetary policy.

    Until now, the ECB has insisted that a rate cut would be harmful and was not supported by sensible economists. Jean-Claude Trichet, the ECB president told the European Parliament on Monday: “The last time we met, we were absolutely convinced that we would not improve the situation [with a rate cut] but that we would hamper Europe if we would go in the direction that is suggested by some.”

    In an interview in Wednesday’s Financial Times, Erkki Liikanen, governor of the Bank of Finland and a member of the ECB's governing council, reiterated the ECB's view that the next move in European interest rates would be up.

    But now that the OECD, a bastion of orthodox economic thought, has flatly contradicted the ECB's position on interest rates, Mr Trichet will find it more difficult in future to reject out of hand a discussion of lower rates.

    In other areas of economic policy, such as the need for lower government borrowing and further economic reforms, the OECD's views chimed with those of the ECB.

    The OECD's call on rates came after it concluded there was a “chronic pattern of weak resilience and divergent activity” in the eurozone economy and that “circumstantial arguments”, such as the Iraq war, oil prices and exchange rate fluctuations, were “not sufficient to explain the string of aborted recoveries in continental Europe”.

    The OECD also dropped the usual diplomatic language of international organisations in relation to the risks posed by growing imbalances in the world economy.

    Cutting the growth forecast for all leading economies, Jean-Philippe Cotis, the OECD chief economist told the Financial Times: “We're not saying there will be a doomsday tomorrow morning, ... but because the adjustments [to global imbalances] are relatively slow, we are running the risk that an accident will happen. That's where we are.”

    The OECD forecast that the US current account deficit would continue to rise, hitting nearly $900bn or 6.7 per cent of US gross domestic product in 2006.

    “Time is running out - the numbers are getting big, big, big”, Mr Cotis added.

    To help the adjustment the OECD said Europe and Japan needed higher growth, the US would have to increase savings and Asian currencies must appreciate against the dollar.

    The OECD said that Japan should avoid giving any appearance of tightening monetary policy because any movement by the Bank of Japan would “prematurely send a signal that deflation has been or is about to be overcome”.

    And in an implicit criticism of the group of seven finance ministers', it said: “These continuing divergences in domestic demand between Europe, and some Asian countries on the one hand, and the US on the other, cannot be treated with benign neglect”.

    The OECD used a simulation model to assess what would happen if there was “an abrupt weakening of the dollar”, not the most likely outcome, but an “unpleasant scenario [which] is gradually looming larger”.

    It estimated economic growth would be at leat one percentage point lower in the US, Europe and Japan even without contagion in the form of lower equity bond and house prices. That outcome also assumed the ECB would cut interest rates to zero.
    news.ft.com/home/europe

    graag gedaan,kck
  2. [verwijderd] 24 mei 2005 21:36
    quote:

    MoneyHoneyMaker schreef:

    wallstreet krijgt zojuist een UPPER KUT .. zo dat met dit bericht te maken hebben?
    Kan ook dat GJ(en de Groote jongens) aan 't kopen gaan.
    Heb greenspan nogwat gesagt?

    kck
  3. [verwijderd] 24 mei 2005 21:38
    quote:

    kck schreef:

    [quote=MoneyHoneyMaker]
    wallstreet krijgt zojuist een UPPER KUT .. zo dat met dit bericht te maken hebben?
    [/quote]

    Kan ook dat GJ(en de Groote jongens) aan 't kopen gaan.
    Heb greenspan nogwat gesagt?

    kck
    Zo te zien heeft die ouwe um weer behoorlijk uit zijn broek laten hangen
  4. [verwijderd] 4 september 2005 19:54
    quote:

    -25- schreef:

    Wat een taal wat een taal ;)
    Imago deuk?
    Je bent al lid vanaf 18 april.
    Normaal reageer je iets vlugger op onregelmatigheden.
    gr.fes
  5. [verwijderd] 4 september 2005 20:05
    quote:

    fes schreef:

    [quote=-25-]
    Wat een taal wat een taal ;)
    [/quote]

    Imago deuk?
    Je bent al lid vanaf 18 april.
    Normaal reageer je iets vlugger op onregelmatigheden.
    gr.fes
    Waarom denk je dat er ';)' achter staat...
    Zucht.
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