Duisenberg condemns US steel tariffs

IMPORTS: European Central Bank (ECB) president Mr Wim Duisenberg has described as "deplorable" the US imposition of steep tariffs on imported steel. But he said the trade dispute between Europe and the US would have little impact on euro-zone economic growth.

"On the euro zone, it will be negligible. Those who will suffer most will be American consumers who will have to pay higher prices," he said.

Mr Duisenberg was speaking in Frankfurt following a meeting of the ECB's Governing Council, which left interest rates unchanged at 3.25 per cent.

Mr Duisenberg expressed support for the Commission's decision to ask the World Trade Organisation (WTO) to intervene in the dispute.

"I have full sympathy with all efforts being made at the WTO to prevent the world slipping back into an era of protectionism," he said.

Asked if he expected the US to abandon its strong dollar policy, Mr Duisenberg declined to comment on the exchange rate. But he suggested that the dollar's strength was linked to the crisis in the US steel industry.

"This deplorable action by the US authorities may have something to do with the strength of the dollar as experienced by the US steel industry," he said.

Mr Duisenberg said that all information available to the ECB suggested that the euro-zone economy had turned the corner.

He predicted that economic growth would return to about 2.5 per cent of GDP by the end of this year.

"There is also increasing confirmation that economic activity outside the euro area is picking up, which should lead to a gradual strengthening of the external demand for euro-area products and services. While the strength of the recovery remains uncertain, there are good reasons to expect a return of economic growth to levels in line with potential towards the end of the year," he said.

Mr Duisenberg expressed concern, however, that some wage deals could be too high. And he urged euro-zone countries to step up structural reforms.

"It is worth noting that despite the continued high unemployment in the euro area, firms continue to report difficulties in terms of recruiting suitably qualified workers. This suggests that further improvements in the functioning of euro-area labour markets and their ability to match labour supply and demand are needed," he said.