| 17.2°C Dublin

ECB's Juergen Stark reiterates firm stand to combat inflation

THE European Central Bank's monetary policy remains accommodative, executive board member Juergen Stark said yesterday, adding that the bank would not ignore country specific problems if they threaten price stability for the whole bloc.

Despite the fierce eurozone debt tensions the ECB has flagged it will raise eurozone interest rates to 1.5pc next month having declared itself in a mode of "strong vigilance".

"Our monetary policy remains accommodative and has a supportive effect on the economy. There are also upside risks to price stability," Mr Stark said. He added that the ECB would do whatever was needed to keep inflation expectations anchored, saying it would not ignore problems in individual eurozone countries if they carried a threat to wider price stability.

While the ECB did not think about individual economies when setting policy, "this does not mean that the Governing Council ignores developments in an individual euro area country," he said.

"Specific national developments can play a role in European monetary policy if they are significant for the medium-term trend of price stability across the eurozone."

The eurozone is currently thrashing out a second bailout package for Greece in a bid to avoid a default and prevent the country's troubles spilling over to other eurozone members. (Reuters)

Irish Independent