The Germans Hang Tight
FRANKFURT -- Karl Otto Poehl presides over the West German Bundesbank from a sleek office graced by a stark impressionist painting of a seated figure titled "The Interpreter." Lately Mr. Poehl himself has been the focus of intense interpretation.</br></br>On the eve of the meeting of the International Monetary Fund and the World Bank, the world's finance ministers, international bankers and big currency speculators are seeking to divine what Germany's central bank will do in the coming days and weeks. Mr. Poehl has been under political pressure from the U.S. to lower the West German discount rate, so as to stimulate domestic demand.</br></br>At least so far, Mr. Poehl has been resisting. On Wednesday, London's Financial Times published an interview with Mr. Poehl under a headline that said: "Poehl explains refusal to boost West German economy." Thursday morning the Bonn daily Die Welt hit the streets with a story quoting Mr. Poehl as saying the Bundesbank wouldn't cut its interest rates just because the U.S. and other foreign officials demanded a greater German contribution to strengthen the world economy. And on Thursday afternoon, as the dollar was falling below two marks for the first time in five years, Mr. Poehl was asked in an interview with reporters of The Wall Street Journal whether the Bundesbank might act for reasons other than American pressure.</br></br>Thus commenced an hour's conversation during which Mr. Poehl, clearly uncomfortable with the way international monetary matters were becoming a public spectacle, sought to put his position "in context." With the afternoon sun glinting from an abstract brass sculpture behind him, Mr. Poehl did not rule out a cut in the discount rate. But he did argue that at the moment, the West German economy is doing all it should be expected to do. He suggested, in regard to exchange-rate concerns, that some other actions could be brought into play.</br></br>Thus commenced an hour's conversation during which Mr. Poehl, clearly uncomfortable with the way international monetary matters were becoming a public spectacle, sought to put his position "in context." With the afternoon sun glinting from an abstract brass sculpture behind him, Mr. Poehl did not rule out a cut in the discount rate. But he did argue that at the moment, the West German economy is doing all it should be expected to do. He suggested, in regard to exchange-rate concerns, that some other actions could be brought into play.