Bundesbank President Karl Otto Poehl saidWest Germany would be badly advised to lower interest rates and
that he believed the economy would continue to recover after a
six-month lull.
    Asked by the newspaper Bild am Sonntag if lower interest
rates could boost the domestic economy, Poehl said: "We would be
badly advised if we forced further interest rate cuts.
    "This could, under certain circumstances, release new
inflationary fears which would then be more likely to lead to
higher interest rates," he added.

    Poehl said Germany had practically no growth in the past
six months because of the mark's surge and the cold winter.
    "But since April, statistics clearly show that the economy
finds itself on a course of growth," he said. "I expect this
development to continue in the coming months."
    Asked about his expectations of a U.S.-European Community
trade war, Poehl said such an event would be disastrous.
    "For this reason we in Europe must avoid everything used by
protectionist forces in the U.S. As pretexts," he added. "This
includes...Eliminating existing restrictions in the EC as far
as possible. Protectionism is not found only in the U.S."
 Reuter
