World News: Banker Says Euro Zone Will Avoid Double Dip
VIENNA -- The euro zone will avoid a double-dip recession despite signs of weakening in Germany's economy, a top European Central Bank official said, suggesting the hurdle for interest-rate cuts or other stimulus remains high.</br></br>In an interview, Austrian central bank Gov. Ewald Nowotny struck back at recent criticisms from the U.S. over Europe's handling of the Greek debt crisis, saying Europeans can handle their own affairs.</br></br>He also expressed frustration at the increasing demands being placed on the ECB to contain the debt crisis, and signaled there is little more the central bank can do to spur growth. "I do not think there are many possibilities for further specific actions," Mr. Nowotny said in the interview Monday in Vienna.</br></br>The ECB at its Sept. 8 meeting downgraded its outlook for the rest of this year and 2012, a surprising reversal for a central bank that raised interest rates two months earlier. Many economists took that as a signal that the ECB might lower its main policy rate, currently 1.5%, if needed to protect the recovery. Other major central banks, such as the Federal Reserve and Bank of England, have policy rates closer to zero, leaving the ECB as the only major developed-country central bank with any firepower on rates.</br></br>Yet Mr. Nowotny's remarks suggest officials would need to see much more weakness to spur a rethink on interest-rate levels.