Internationale druk op ECB om renteverlaging (en)

The European Central Bank today faces new pressure to bring the euro's rapid rise against the dollar under control by cutting interest rates.

Speaking at the World Economic Forum in Davos, Switzerland, the OECD's chief economist Jean-Philippe Cotis said that a further rise in the value of the euro should mean a cut in rates.

"If the euro appreciates once again, then of course, the Europeans would have to use all measures possible for a recovery to sustain itself", he told journalists.

If the euro rises 10 percent more, "It would be sufficient to undercut gains made until now", he said.

Yesterday the euro was trading just above $1.27, down from its recent high of almost $1.29, but massively up year on year.

A 10% rise would take the euro well above the a rate which prompted the ECB to 'verbally' intervene on 12 January, when the head of the central bank expressed concerns about "brutal" foreign exchange swings.

It would also bring it above the $1.35 level lauded by Central Bank officials as a suitable intervention level.

Mr Cotis also warned yesterday that as long as domestic demand in Europe does not match the improving performance of exports, "Europe is flying with one motor".