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Article: Too much interest?(European interest rates)
- Article from:
- The Economist (US)
- Article date:
- October 31, 1998
CopyrightCOPYRIGHT 1998 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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EUROPE's left-leaning politicians may want a cut in interest rates. But Europe's central bankers remain unconvinced. Who is right?
Rate cuts are on the agenda because the euro-zone's economy looks as if it is slowing, and prices are stable. The European Commission has trimmed its forecast for euro-zone GDP growth next year from 3.2% to 2.6%. Export growth is slowing to a halt. The euro currencies' recent strengthening(their average external value is up around 10% since August(will not help matters. And with faltering growth, unemployment, which remains stubbornly high, may stop falling or even edge up again.
As well as reviving growth, lower rates might ...