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Business

Economy Minister Calls for Rate Cut

German Economy Minister Wolfgang Clement on Thursday called on the European Central Bank (ECB) to cut its interest rate, saying it was "remarkably" more reserved than other central banks. "I expect the ECB to take into account growth by lowering (interest) rates, in the context of monetary stability," he told the daily Passauer Neue Presse. The ECB has held its rate unchanged at two percent since June 2003 in spite of calls for it to show greater flexibility. Clement drew a comparison with the Swedish Central Bank and the Bank of England which "have reacted in an appropriate way to the state of growth with rate cuts." In June the Swedish Central Bank cuts its rate to a historic low of 1.5 percent, while the Bank of England this month shaved its rate from 4.75 percent to 4.5 percent. Earlier this month the ECB left its rate unchanged. Its president, Jean-Claude Trichet, defended the decision by the bank to maintain its key euro-zone interest rates, saying they were "appropriate" and noting signs of a pick-up in the euro-zone economy.

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