The International Monetary Fund has said the European Central Bank should join the US Federal Reserve and cut interest rates to support world economic growth.
"We have every indication in the US of a willingness to deploy policy to deal with the effects of the growth slowdown," Mr Stanley Fischer, the IMF first deputy managing director, said at a meeting of the World Economic Forum. "That could be done to a considerable extent in Europe as well."
However, ECB officials have said they do not need to follow the Fed yet. Bundesbank president Mr Ernst Welteke said that tax cuts will support growth in the US but Mr Fischer warned that world economic growth might slow to 3.5 per cent this year from 4.7 per cent in 2000. Last autumn the IMF said world growth would be 4.2 per cent in 2001.
"But we are a long way from global recession," Mr Fischer said. The statement follows Fed chairman, Mr Alan Greenspan's warning last Thursday that US economic growth has almost disappeared.
The German finance minister, Mr Hans Eichel, said that Europe will only experience a limited slowdown. "The dynamism of the European economy remains unbroken," he said.
The French finance minister, Mr Laurent Fabius, concurred. "Europe is back," he said.
