EU may have to print money to survive global crisis
The EU may need to print money to get out of the economic crisis, the governor of the Central Bank warned yesterday.
John Hurley spoke as the Bank of England began a process of "quantitative easing" -- to pump cash into the British economy. However, this has led to a fall in the value of the pound and could trigger inflation in the future.
Asked directly about the prospect of Europe printing money, Mr Hurley said he was in favour of examining what he described as "a legitimate operation, depending on interest rates".
The European Central Bank is currently divided on the issue. ECB president Jean-Claude Trichet has expressed doubts about the wisdom of printing money but others are in favour.
German council member Axel Weber said last week there are "pros and cons" while France's Christian Noyer said the ECB is still examining all its options. "I'm certainly very much in favour of of the examination that is taking place," Mr Hurley said. "It is something that has to be examined... if the recession continues to deepen."
Still, quantitative easing might not be enough to halt the recession, the governor said during two hours of gloomy testimony to the Oireachtas Committee on Economic Regulatory Affairs. Mr Hurley made repeated pleas to the committee not to underestimate the severity of the world crisis.
"No one should be in any doubt about the seriousness of the global economic situation, which is not easing, and the seriousness of our own difficulties," he said. We cannot continue to pay ourselves more than our European neighbours, warned the civil servant who is himself paid €368,000 a year. 
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