VIENNA: The European Central Bank is not planning any more measures to help the battered economy, having already played its part in fighting the euro zone crisis, Governing Council member Ewald Nowotny said on Thursday.
He added, however, that it is still too early to remove central bank support. This contrasted with separate comments from fellow ECB policymaker Erkki Liikanen, who stressed the need for a timely exit from extraordinary measures.
Late last year, the ECB cut its interest rates to equal a previous record low of 1.0 percent and has since fed banks more than 1 trillion euros ($1.3 trillion) in ultra-long 3-year funds and has loosened its collateral rules.
All this has pumped money into the euro zone economy as it struggled against both an economic downturn and a debilitating debt crisis.
"Just now we have to see how the various measures affect the economy," Nowotny told Reuters Insider TV in an interview.
"This will take some time; in the meantime, I do not see any need for further action," he said.
He added: "We have done what a central bank can do ... of course there are other players who have to do their part."
Nowotny also said now was not the time to worry about removing central bank support, adding that the chance of a well-timed exit had been thought before any measures had been implemented.
"When you start an action, you also have to think how to end it. Whatever we do, we also have to take into account how long we do it, what is the exit strategy," he said. "It is not a matter of concern right now."
Liikanen, who is the Bank of Finland governor, said that before one could declare the debt crisis finished, the ECB needs to quit its extraordinary measures and have the economy stand on its own.
"Central bank measures can be used to calm the financial markets, but a permanent solution to the debt crisis will require both successful fiscal and structural policies and a controlled and timely exit from the temporary central bank measures," Liikanen said.
He did not give any time frame for the exit beyond stating it would have to be done when the time was ripe.
INSIDE ECB
When Nowotny was asked about potential strife between the German Bundesbank and the ECB regarding support measures, Nowotny said "This is not true ... Of course you have discussions."
The Bundesbank and its head Jens Weidmann have expressed concerns about looser lending rules which it uses to accept guarantees in exchange for loans. The German central bank used most of its last year's profits to boost its risk buffers.
Asked about the possibility of further interest rate cuts, Nowotny, who also heads the Austrian central bank, said they were not being discussed right now.
He also said there were no indications of inflation risks at the moment. Liikanen, on the other hand, repeated the ECB line that inflation was expected to stay above 2 percent this year, before falling to be in line with the central bank's target of just below 2 percent.
Nowotny also said there were clear signs of stabilisation in the financial markets after the ECB's cash. Liikanen also offered the central bank a pat on the back, saying the injection had had "decisive impact".
The ECB itself said in its March monthly bulletin published on Thursday that it might take several months before the impact of 3-year money is felt and credit rebounds.
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