Finnish governor defends right of ECB to impose higher interest rates
FINLAND's central banker governor Erkki Likanen has defended the ECB's right to impose higher interest rates on countries like Ireland, insisting economies with problems "must handle them by themselves".
The comments from ECB member Mr Likanen were published by the 'Wall Street Journal' yesterday, a fortnight after the Frankfurt powerhouse suggested it would hike interest rates in early April.
Asked if he was "worried" the rate hike would damage economies like Greece, Ireland, Portugal and Spain, Mr Likanen stressed that the "guiding principle" was to look after the euro area as a whole.
"Specific countries may have their own structural problems in terms of their competitiveness or their public debt," he said. "They must handle them by themselves, by their own measures."
Mr Likanen also dampened hopes that the Japan crisis could trigger an interest rate reprieve, saying nothing had "fundamentally" changed since the rate hike guidance was given on March 3.