Tietmeyer optimistic on German economy

 

THE Bundesbank president, Mr Hans Tietmeyer, said in an interview published today there were good chances that Germany would see improved economic conditions this year.

"The mood seems to me to be worse than the reality," Mr Tietmeyer told Die Welt. Extracts, of the interview were made available in advance.

Mr Tietmeyer said he was optimistic for growth because of improved world trade, moderate wage agreements in the chemical "and textile industries and an easing of exchange rate tensions.

"I also hope that capital market rates will continue to fall rather than rise," he said.

Mr Tietmeyer stressed the importance of not easing "the substance" of the tough convergence criteria which apply to EU countries wishing to join the common European currency.

He said the recommended ratio of a 3 per cent budget deficit to GDP was "rather too high than too low".

The paper quoted him as saying that a failure of monetary union, or a delay beyond the planned start in 1999, would be regrettable, but its impact should not be exaggerated.

"The Euro alone is not a patent for everything. Its mere growth nor employment problems," he said.