FRANKFURT, July 12 The European Central Bank's
interest rates are too low for Germany, Bundesbank chief Jens
Weidmann said on Saturday, adding that ECB monetary policy
should remain expansive for no longer than absolutely necessary.
Speaking at a Bundesbank open day for the public, Weidmann
noted that many savers in Germany were irritated by low interest
rates but said these were aimed at supporting investment and
The ECB cut interest rates to record lows last month as part
of a package of measures to breathe life into a sluggish euro
zone economy, where inflation is running far below the central
bank's target and there is a dearth of credit to smaller firms.
The German economy, Europe's largest, has been outperforming
other countries in the bloc, however.
"It is clear that monetary policy, when seen from a German
viewpoint, is too expansive for Germany, too loose," Weidmann
told a crowd at the start of the open day. "If we pursued our
own monetary policy, which we don't, it would look different."
"But we are in a currency union," he said. "That means that
in our monetary policy decisions, we must orientate ourselves to
the whole currency union."
Repeating a warning he has made previously about the risks
of leaving policy loose for too long, Weidmann added: "This
phase of low interest rates, this phase of expansive monetary
policy, should not last longer than is absolutely necessary."
Bundesbank Vice President Claudia Buch said property prices
were overvalued in some big city areas in Germany by up to 20-25
percent, but that there was no acute risk of a price bubble
(Writing by Paul Carrel; Editing by Elaine Hardcastle)