To applause from MEPs on the European Parliament's Economic and Monetary Affairs Committee, Wim Duisenberg, President of the European Central Bank yesterday brushed aside a call to resign from a French MEP and insisted that the euro was a success. Reporting to MEPs on recent developments in the eurozone, Mr Duisenberg defended the ECB's decision to raise interest rates by 25 basis points at its last meeting, in response to increasing growth in the money supply and inflation breaching the ECB's 2 per cent guideline. He recognised that the inflation would probably remain above 2 per cent for some months. On exchange rates, Mr Duisenberg admitted that the fall in the value of the euro was "clearly a cause for concern", but was not in line with strong economic fundamentals in the euro area. Concerning currency intervention, he said this was a tool that was available. If this was to happen, "I will fully inform the markets and you after they have taken place, not before", he added.
The text of Mr Duisenberg's speech and transcript of questions and answers is on www.ecb.int.