MILAN, Dec 8 (Reuters) - The European Central Bank has the tools to counter a possible excessive slowdown in inflation and would act if necessary, Governing Council member Jens Weidmann told an Italian newspaper on Sunday.
'I don't want to speculate about future monetary policy moves. But, rest assured, we still have other tools at our disposal. We are ready and able to act,' the head of Germany's Bundesbank was quoted as saying in Il Sole 24 Ore.
The ECB left its key interest rate at 0.25 percent last week but its president, Mario Draghi, said the central bank was ready to take fresh policy action though it did not yet have a detailed plan of which policy tool to use when.
ECB staff projections released last week show inflation well below its target of below but close to 2 percent over the next two years.
Weidmann said the ECB's surprise decision to cut its key rate last month, and to extend to mid-2015 the full allotment of funds requested by banks at refinancing tenders, showed its commitment to act if needed.
Weidmann also said the coalition deal agreed in Germany between centre-left Social Democrats and Chancellor Angela Merkel's conservatives contained some elements that risked weakening the sustainability of the pension system and reducing flexibility in the labour market.
(Reporting by Valentina Za; editing by Steve Scherer and Kevin Liffey) Keywords: ECB WEIDMANN/PAPER
(email@example.com)(+39 02 6612 9526)
Copyright Thomson Reuters 2013. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.