And I will only talk about programs to boost the economy once a recession is really here. Economists now say the ECB could hold off on a rate cut until June or July, in stark contrast to just two weeks ago when most thought the bank was planning a cut. Complicating matters are the contrasting economies of the euro-using nations, a bloc of 290 million people stretching from Finland to Portugal. Some countries, such as France, Sweden and Austria have mild inflation and could easily withstand an interest rate decrease to boost the economy. Others, such as Portugal, the Netherlands and Ireland, lead the pack in inflation and could actually use a rate increase to cool price pressures.
Economists grudgingly accept the policy as a cost of having a unified currency in Europe.
One size doesn't fit all. But if you're going to have a single currency, there's no alternative to a single interest rate. The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.