Weber says economic downturn steeper than expected

BERLIN - The worldwide economic downturn is steeper and more extensive than expected, Bundesbank President Axel Weber said in an interview released on Sunday.

By (Reuters)

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Published: Sun 25 Jan 2009, 8:23 PM

Last updated: Sun 5 Apr 2015, 10:26 PM

Weber, a member of the European Central Bank's policy making Governing Council, also said in an interview to appear in Bild newspaper on Monday that he was concerned about the inability so far to contain the crisis in financial markets.

"The economic downturn is more powerful and more comprehensive worldwide than we expected it to be," Weber said.

"It worries me that containing the financial market crisis hasn't yet succeeded," he said.

"There are always new distortions, always more sectors affected and new losses which in turn lead to new requirements for write-downs."

Weber told Bild the crisis has turned into the worst since World War Two.

"The problems in the markets and the ferocity of the collapse has not been seen in this dimension in previous decades. I cannot remember the economy worldwide caving all at the same time as steeply as this," he said.

Weber said the German government's steps to stabilise the banking sector and the economy as a whole would help limit the brunt of the downturn during the course of the year.

"It will take time for all the measures to start having an impact," he said.

"But I would expect that the economy will start growing again slightly in the autumn and it will continue recovering in 2010."

Weber said Chancellor Angela Merkel's government had responded in a timely manner to the crisis.

"The government put together the bank rescue package at an early stage in October and has since agreed two stimulus packages," he said. "That all came at the right time and it will clearly have an impact and will boost the economy."

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