Europe’s economy is not doing as badly as some people think, Germany’s central bank chief Jens Weidmann said Sunday as he gave an upbeat prediction for Germany, its biggest component.
On Germany’s outlook for 2015, he said: “As things are right now, and if oil prices stay this low, inflation will be lower than expected, but growth will also be better.”
The central bank, or Bundesbank, early this month cut its growth forecasts for Germany to 1.4 percent for this year and 1.0 percent for 2015.
Weidmann said that “Europe is not doing as badly as some people believe,” speaking to the newspaper Frankfurter Allgemeine Sonntagszeitung.
“The forecasts assume a recovery in the eurozone, albeit at a restrained pace.”
He reiterated his opposition to plans by the European Central Bank to purchase government bonds from eurozone countries to promote growth, saying that current cheap oil prices already amounted to a virtual stimulus programme.
“We have been handed a stimulus package for free, so why add to it with monetary policy?” he asked.
“It irritates me that in the public debate lately there has been just one question: When will you finally buy?” He added that the ECB should not be swayed by pressure from financial markets.
“Losses from these purchases will be the joint liability of central banks in the eurozone and, in the end, of taxpayers.”