P. M. BRIEFING : German Banker Warns of Rates
The head of West Germany’s powerful central bank said today that German economic unification need not lead to a surge in interest rates.
But Bundesbank President Karl Otto Poehl, speaking on the eve of international monetary talks, gave a clear warning to Bonn politicians that rate fears will subside only if East and West German marks were swapped at a rate that makes economic sense.
“If we set a solid and economically sensible framework for this unification process which does not endanger price stability in West Germany, the fears of a further rise in interest rates are unfounded,” Poehl told journalists.
Poehl’s remarks after Franco-German economic talks appeared calculated to calm nervous financial markets ahead of Saturday’s meeting here of the Group of Seven industrial nations--the United States, Japan, West Germany, France, Britain, Italy and Canada.
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