” “Germany’s top central banker warned that the European debt crisis could take a decade to overcome, apparently contradicting claims from other top European officials that the worst has passed.
He also predicted that the European Central Bank (ECB) might cut interest rates depending on future economic developments.
“Overcoming the crisis and its effects will remain a challenge over the next decade,” Bundesbank President Jens Weidmann told The Wall Street Journal.”The calm that we are currently seeing might be treacherous” if reforms are delayed, he said.
“Everyone is asking what more can the central bank do instead of asking what other policymakers can contribute,” Weidmann noted, adding that the central bank could cut interest rates if new information warranted such a move.
“We might adjust in response to new information,” however, “I don’t think that the monetary-policy stance is the key issue.” The ECB cut its key interest rate to a recod low 0.75 percent in July.
European Commission President Jose Manuel Barroso last week claimed that the worst of Europe’s crisis has passed. “I believe that the EU has come through the worst of the crisis but the situation is still fragile,” he told reporters during a visit to Prague, according to various newswire reports.
Meanwhile, Weidmann said that “a point that I think is important to make — perhaps less for my central bank colleagues than for finance ministers — is that the medication monetary policymakers administer only cures the symptoms and that it comes with side effects and risks.”
The International Monetary Fund (IMF) warned Wednesday that eurozone companies face a massive “debt overhang” that could extend the downturn and possibly spark a more serious crisis, The Washington Post reported….”
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Feels like it’s been dragging on for a century already.
Pain always feels like it lasts longer than pleasure….