The European Central Bank took the markets by surprise yesterday and cut interest rates for only the second time in its history to ward off the threat of recession in the eurozone.
New facts lead to new assessments .
Until yesterday, Mr Duisenberg and fellow members of the ECB's governing council had stood firm in the face of pleas by European and US policymakers for them to join global efforts to revive the ailing world economy. A top economist at the International Monetary Fund even suggested the ECB was part of the problem instead of the solution. The message that Europe is unlikely to remain insulated from a global recession appears finally to have penetrated the ECB's Frankfurt headquarters. After its hawkish rhetoric in recent months, yesterday's decision caught markets off guard and seemed to signal the bank is backtracking. While Mr Duisenberg insisted that political considerations played no part in the bank's decision, analysts said external pressure had almost certainly played a role.