The ECB governing council member said that Europe’s economic recovery could last a decade, yet repeated his call to national governments to take responsibility for reversing the continent’s fortunes.
“The medication monetary policy makers administer only cures the symptoms, and it comes with side-effects and risks,” said Weidmann, who is also president of the German Bundesbank.
Yet, speaking to the Wall Street Journal, he admitted that the ECB “might adjust [monetary policy] in response to new information” in the coming months.
At its April policy meeting the ECB President Mario Draghi said it would “monitor very closely” all data and stand “ready to act” to boost the recession-hit euro area.
The euro dropped on Weidmann’s words, sinking from above $1.313 to around $1.304.
The drop “highlights that the euro’s biggest risk factor remains that of a rate cut and not political uncertainty in Italy, austerity in Portugal or the threat of taxing deposits in the Eurozone,” commented Ashraf Laidi, chief global strategist at City Index.