ECB Ready to Lower Interest Rates

ECB Ready to Lower Interest Rates, Monetary Policy Not Drugs Economic Disease

The euro weakened against the Japanese yen, after expectations the European Central Bank (ECB), which is expected to cut interest rates at its monetary policy meeting next week.

EUR / JPY fell by 0.12% to the 129.35, the high price of 129.90.

As reported, the European Central Bank denies the assumption that mentions that the program budget cuts in some Euro countries failed to meet expectations. According to the ECB Executive Board member, Joerg Asmussen, a fiscal consolidation strategy to achieve long-term financial balance of the post and not the current crisis solution. 
The ECB considers that the effects of interest rate cuts to troubled countries will be very limited. This is where the role of fiscal consolidation is needed so that the central bank's policies supportive not be in vain.

Asmussen considers the application of interest rates too low for a long time also have negative consequences, such as reducing the incentives for a government and banks to adjust the interest rate climate.Based on various comments of the high officials, the ECB signaled not to replicate what has been done by the central banks in developed countries, especially in terms of launching the stimulus.
What has been decided by the Bank of Japan, the U.S. Federal Reserve or the Bank of England is not necessarily going to work in Europe. Asset purchases on a large scale is not considered to be effective impact on the economy of the euro, given the weaker currency is not always beneficial to all countries. The slide is more difficult to digest in the single currency users as uni-monetary rely interest rates are different too.

"Monetary policy is not the weapon (primary) to be able to cure all economic ills, 'thus less over statement ECB Executive Board member, Joerg Asmussen.