the European Central Bank (ECB) members Smaghi (Lorenzo Bini Smaghi) Wednesday (23rd) that the country's ability to sell bonds in the eurozone should be limited, for countries break the deficit ceiling, penalty mechanisms must be started automatically.
Smaghi said, you must reduce the freedom of States to issue bonds, so as to avoid borrowing beyond the scale of conventions happening with other European countries.
Smaghi said: "if we want to take practical action to cut deficits, more limited then we need to convince financial markets. "
Smaghi added that the Central Bank's benchmark interest rates so low, resulting in very loose monetary policy and and there is a risk of damages to the economy. He said the present situation in comparison with 2005, when Central Bank started raising rates until 2008.
he also said that inflation does not appear to date the second-round effects. His emerging markets, especially China was concerned about the momentum of inflation heating up, saying monetary policy makers should act decisively higher interest rates.
