By Peggy Corlin - 22nd May 2006
Euro interest rates do not need to be raised further, French finance minister Thierry Breton said Tuesday.
The French finance minister considers that any further interest rates rise is not necessary as Paris inflation risk to be low.
“I think we should keep being sensible,” Breton said.
After forecasting French growth at between two per cent and 2.5 per cent of GDP in 2006, he pointed out that the French government was “very confident”.
But Breton has made it clear that French growth will depend on international euro exchange rates and oil prices.
The French has downplayed, however, the impact of rising oil prices on inflation.
On June 8 the ECB is likely to increase the main EU interest rate up 0.5 per cent to three per cent.
Yesterday, ECB president Jean-Claude Trichet criticised the low level of productivity in the euro-zone.
Trichet said that Europe’s economies were too rigid to embrace technological progress.
In the meantime, IMF director Rodrigo de Rato also pointed out that Europe’s monetary policy should remain cautious.
“Resumption of EU’s growth is only starting” he said.
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