ECB and interest rates (J. O'Connor's top ten)

[Barbara Laurence]

Top ten reasons why ECB won't cut interest rates:
10. ECB wants to protect Germany and Europe from even the remote
possibility of inflation.
9. ECB knows that common currency is one thing, a European state another,
hence acts in name of strongest state, Germany, where the CB was happy with
the current ECB rate, 3 percent.
8. ECB feels threatened by social democratic/green governments, especially
Germany's, chooses to deal with democratic demands to lower rates by
ignoring them.
7. ECB understands more clearly than the European CBs that the future
belongs to financial markets, and that financial markets at the moment are
happy with a 3 percent rate.
6. ECB wants to discipline social democratic governments to get flexibility
legislation in place, as in "flexible labor markets." ECB understands the
differnece between full employment and job security and opposes both.
5. ECB needs to assert its independence from the U.S., at least coming out
of the gate.
4. ECB wants to discipline unions, and as with the social democrats uses
slow growth to accomplish this.
3. ECB will not be a party to making Germany another consumer of last
resort. Unlike the U.S. trade deficit, which influences the dollar/yen/mark
rates very little, a European trade deficit would push the Euro down, down.
2. ECB thinks that German and European unemployment generally will not
yield to lower rates and an increase in aggregate demand, anyway.
And the number one reason why ECB won't lower interest rates is: ?
Jim O'Connor