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On September 11, Jean-Claude Trichet, President of the European Central Bank will attend a hearing to respond to current developments in the capital markets, and possibly defend the actions that ECB took by raising interest rates to support the European economy.
The head of European Parliament’s Committee on Economic and Monetary Affairs, Pervenche Beres, has stated that the ECB should definitely stop hiking interest rates in order to support the economy. She stated that the strong Euro is harming the European economy, and is more concerned now than ever before of the damage that may be done to the economy overall.
Up till now, the ECB’s answer to the current turbulence in the market was to provide liquidity, however, Beres believes that they should also begin to consider at what rates the European economy can begin to prosper.
The September 11th hearing, by the ECON committee, may provide some much needed insight into why the ECB took the actions that they did, however, according to Beres, the actual questions that Trichet will be answering, will depend on what the ECB governing council decides on Euro zone interest rates on September 6th.
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Posted on Dec-14-2007
