European Central Bank President Mr Wim Duisenberg today defended the ECB's decision on May 10th to trim its key lending rate by a quarter of one per cent, citing the likely path of future inflation.
Speaking to a European Parliament committee, Mr Duisenberg said the ECB no longer saw a future inflation risk from growth in money supply while slower than expected economic growth should also dampen upward pressure on consumer prices.
Mr Duisenberg said slower growth was no excuse for governments to let up on fiscal and economic reforms.
He also reiterated the ECB's desire to see wage settlements kept in line with the ECB's inflation target.
Separately, Mr Duisenberg reiterated the ECB's opposition to early introduction of euro notes to the general public.
"The reasons for this decision... are still valid and there are, according to our assessment, no elements which would justify a renewed reflection on this issue at this late stage of preparations," Mr Duisenberg said.