ECB will not set rates to suit troubled members: Weber

Wed Jan 27, 2010 6:43am EST
 
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FRANKFURT (Reuters) - The European Central Bank will not set euro zone interest rates to suit the bloc's few troubled members, Governing Council member Axel Weber said on Wednesday.

"We have to do monetary policy for the (monetary) union as a whole... we cannot take into our decisions developments in certain parts," Weber told broadcaster CNBC in an interview in Davos.

He also kept up the tough European rhetoric toward Greece, saying it had no option but to meet its promise to slash its budget deficit.

Weber, who heads Germany's Bundesbank, added that euro zone growth was expected to be around 1.5 percent next year and said that there were no signs on the horizon of a worrying surge in inflation.

Addressing U.S. President Obama's plans to cut the size of banking giants and force them to split off their more risky trading activities, Weber said he was cautious about splitting banks but welcomed the other measures.

(Reporting by Marc Jones)