Tags: Roubini | ECB | Risks | Hurting | Growth | Raising | Benchmark

Roubini: ECB Risks Hurting Growth by Raising Benchmark Rate

Friday, 01 Apr 2011 10:30 AM

Nouriel Roubini, the economist who predicted the financial crisis, said the European Central Bank threatens to hurt the euro region’s periphery states by raising borrowing costs next week.

“They’re going to likely raise rates in April and then continue for a few times this year,” Roubini said in an interview today from Cernobbio, Italy, with Maryam Nemazee on Bloomberg Television’s “The Pulse.”

“But you have five countries in the periphery where there’s almost no growth or contraction, where you have severe banking problems, where you’ve had a loss of competitiveness, where there is a need to restore economic growth.”

ECB President Jean-Claude Trichet has signaled the bank is ready to raise the benchmark rate from a record low of 1 percent when policy makers meet on April 7 to fight increasing inflation pressures, even as governments from Ireland to Portugal struggle to lower their budget deficits. Roubini said at a press conference he expects the central bank to raise borrowing costs three times to 1.75 percent this year.

“I fear that an early hike is going to increase the growth fragility, the worsening of competitiveness,” said Roubini, who also co-founded Roubini Global Economics LLC.

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Nouriel Roubini, the economist who predicted the financial crisis, said the European Central Bank threatens to hurt the euro region s periphery states by raising borrowing costs next week. They re going to likely raise rates in April and then continue for a few times this...
Roubini,ECB,Risks,Hurting,Growth,Raising,Benchmark,Rate
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2011-30-01
Friday, 01 Apr 2011 10:30 AM
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