The difficult decision of the BCE

The European Central Bank (BCE) is the manager of deciding the increases or descents of the interest rates for the Euro area. That the most difficult task takes a fancy when it is a question of an area integrated by different economies that grow to different rhythms. This way, Germany already asks for an increase in the interest rates, while for countries as Spain or Ireland it would ballast enormously he would suppose a pernicious situation.

At present the types are in 1 %, but the European Central Bank will face a complicated quandary in the next months because everything points for which the economies of the region will go out of the recession to different that would need different measurements. Some economies as the German or the French might need a few increases of types that would be very harmful to Spain.

Gilles Moec, economist of Deutsche Bank in London, thinks that “the BCE will have to normalize the types next year and this will beat to countries like Spain and Ireland that they will remain in recession and loaded with a big heap of debt”, he mentions. Moec foresees that the institution presided by Jean-Claude Trichet will duplicate the types at the end of 2010, which at present place 1 % in what it is his historical minimum.

The principal economies of the Euro area, which are Germany and France, have already gone out of the recession in the second trimester of this 2009, there being registered positive interquarterly growths. Also these two countries will support the footpath of the recovery in the next trimesters of the year and will grow 0,2 % in 2010 according to the forecasts of the European Commission.

Exactly in the opposite situation there is Spain, which according to the said forecasts of the European Commission will be the only one of between the big States of the EU that supports a negative growth in the fourth trimester of this year, and which will suffer the biggest budget deficit of the region. Also, the Commission foresees that our economy contracts 0,9 % in 2010.

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1. Japan supports the types to 0,1 %