Austria's Central Bank Governor Ewald Nowotny talks to Reuters Global Treasury Editor Stella Dawson about currency wars, quantitative easing and the ECB's bond-buying program.
financial crisis shattered previous understandings about monetary policy and the relationship between interest rates . hopes to have is. Of course that this does not just phenomenally interest rates that this sort of it is -- Alex Stewart phenomenon exchange rate does that -- does that really exchange rate that means That would impose trade tariffs on China or if it fails to appreciate more rapidly. The global financial crisis shattered previous understandings about monetary policy and the relationship between interest rates . Inflation growth. Joining us today. Is able to -- me. Austria's national bank governor and a member of the European central bank's governing council this morning thank you very much government about it for joining us. You've just come back from Washington. The big talk laws about global currency -- you said the systems but always seen as a shouting match between the US Europe and China. How we could to avoid currency war. Relief for us to have the say. I did not see a shocking admission and because. We'll treat to have is of course that you have to a certain extent different development economic developments. And maybe economic needs. In different parts of the world. This is not an entirely new this situation. We have had an accident. Monetary cooperation between vigorous. It's Europe in the past two years so I don't see a problem that that much change. And with regard to relationship between cigarettes and China. -- c.s that have. Economic developments in China an increase. In British levels and increasing consumption. That was some kind of time mine to reduce. The tensions that you have to sort of now. Did China. Give any commitments after these things that you are well that they will move to faster appreciation of the won. For Latin hooked in the position driven. To be informed -- about that not smoltz on an official. Skated. But so on the other hand so from the talks that they hadn't thought. The discussions I had for some Chinese source -- columnists. I have a feeling there's a certain understandings. Four. The position and -- has to say your -- clearly. This is not just the problem of China that a number of other as he -- countries that also have -- substantial. Trade surpluses and so. I presume you vigorous so I think it's has to be seen in the more channels. Few. And so are quite obviously that she's -- Really be an adequate forum to discuss this. You sound very optimistic about this. And we -- get through two years does he say a week of excellent cooperation globally. What seems to be developing -- countries consuming national economic contrasts. What gives you optimism that you can break true. That passion in order to restore. A more balanced global growth. China is not hasn't moved by 2%. It is resisting the political pressure. This is leading to the discussion. That's very widespread in the markets right now. Off currency was you know telling him I think that's making -- optimistic. I'm not in the position to affiliate some of those -- you. Very optimistic but just that's an economist and I'm removes this is this estimate of between. China and dangerous primarily so it's nothing that we have an authority to. Discuss about justice and economist. We'll two hopes to have is. Of course that this does not just phenomenally interest rates that this sort of it is -- Alex Stewart phenomenon exchange rate does that -- does that really exchange rate that means who was there to taken to account. Of the differences inflation's. Development. And -- what to do -- see you in China. Is that we have of course the very substantial increase in wages. A substantially increasing consumption of course -- for a very low level. But so. As I said that's an economist of let's see this more in the medium term perspective. And what sort literally. We'll make us very nervous. Oral fluid. And the world economy it is if some let's say it unilateral steps. Would be taken. That -- Oops spark. A -- political and based crisis. That is something that sort of groups of people would damage in the world economy. In general. Are you referring to the legislation before the US congress. That would impose trade tariffs on China or if it fails to appreciate more rapidly. Yes. I have. -- It is not have been known in no position to comment and decision in the kid but if if this could be seen this kind of off of symbols. All food. Let's say that put some leads to to a new stage. In this. Disputes. Then we my opinion in this situation. Current vote for dynamics could to stop it. Very attractive rather difficult than two to stop it because of all the psychological damage could be done on both sides so I think -- shall -- Of you're careful and take the first step to think about what could be the second system. And about me thank you very much for joining us you're. Thanks to ECB member he felt about me. I'm still -- Dawson and this is Reuters.