Duisenberg 'not pressed on rates'

THE PRESIDENT of the European Central Bank yesterday denied European finance ministers had pressed him to cut rates, as the ministers moved to reassure him that Europe would not relax curbs on borrowing.

Wim Duisenberg said he had a "useful discussion" in Brussels with the finance ministers of the 11 countries participating in Economic and Monetary Union (EMU).

When asked if he was under pressure to set lower interest rates for the euro-zone, he said: "None whatsoever."

Recent calls for lower rates from European politicians - in particular, from Oskar Lafontaine, the new German finance minister - have unnerved market analysts, who say it is crucial that the ECB is completely free from political interference. Speaking in Vienna, an ECB council member warned that "aggressive" calls for lower rates from politicians could undermine the bank's independence.

Arnout Wellink, president of the Dutch central bank, said politicians risked "making the interest rate issue the acid test for the independence of the ECB".

Meanwhile, ministers attempted to reassure Mr Duisenberg that they would maintain their tough fiscal stance.

According to Yves Thibault de Silguy, EU monetary affairs commissioner, "No one [at the ministerial meeting] called into question the necessity of pursuing budgetary consolidation."