European Central Bank monetary policy is not holding back German economic growth and a rate cut would not provide much of a boost, an economic adviser was quoted as saying today.
"European monetary policy is not restraining German economic growth," Beatrice Weder di Mauro, who is also an economics professor at the University of Mainz, said in an interview with the Frankfurter Allgemeine Zeitung.
"If the Bundesbank were still in charge of monetary policy it would be unthinkable for it to reduce the nominal interest rate at the moment," she said of Germany's central bank.
"As interest rates are in any case very low, the extra boost to growth would probably not be very big. The question is more how long low rates can be maintained."
The ECB has come under pressure from policymakers in the 12-nation euro region in recent weeks to trim borrowing costs to spur the bloc's lacklustre economies.
However, ECB President Jean-Claude Trichet has
indicated the bank was not preparing financial markets for a change in interest rates in either direction.
Ms Weder di Mauro said money supply in the euro zone was very generous and there was strong credit growth.