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ECB's Nowotny rejects German 'hysteria' over euro

An officer scoops up a handful of 10-euro-cent coins at the Greek National Mint in Athens in this October 24, 2008 file photo. REUTERS/John Kolesidis/Files

BERLIN (Reuters) - The euro is trading in a “normal range” and there is no reason for hysteria about it, either in Germany or elsewhere, ECB Governing Council member Ewald Nowotny said on Monday.

The euro slid to a four-year low on Monday on sovereign debt worries and fears that planned belt-tightening measures will hurt growth in the euro zone, fuelling concerns the single currency may face free-fall.

“There is no euro problem,” Nowotny told a conference in Berlin.

Noting that the euro was in a range of $1.20 to $1.30, he added: “We are absolutely ... in the normal range, so there is no specific reason for any special hysteria.”

Nowotny also dismissed concerns in Germany that inflation pressures may pose a risk.

“I am ... almost astonished that there is so much hysteria -- and unfortunately to a certain extent especially here in the country where we are guests -- about inflationary pressures,” said Nowotny, also who heads Austria’s national bank.

“This is really not the problem we have. We have a problem of too slow growth.”

Last week, Bundesbank chief Axel Weber -- another ECB policymaker -- said the ECB’s decision to buy government bonds carried a significant risk for price stability and the purchases must be limited to achieving their purpose.

Reporting by David Stamp and Paul Carrel; editing by John Stonestreet

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