Therefore, this cut also has to include those currencies whose interest rate already lies at the bottom of the current range. The Bundesbank’s decision to cut the repo rate by 30 basis points is our contribution to that coordinated action. The decision is compatible with both the monetary situation and the overall economic conditions.
The early announcement of the interest rate level for the launch of the euro may help stabilise expectations in the financial markets. But of course, the rate cut cannot solve the severe structural problems in most of the euro countries. This is particularly true of the structural problems on the labour markets.