European Economic Affairs Commissioner Mr Pedro Solbes today raised the heat ahead of a meeting of Group of Seven finance ministers by rejecting US Treasury Secretary Mr Paul O'Neill's prescription for the euro zone.
Mr Solbes said European policymakers were better informed than Mr O'Neill on the euro zone economy and stoutly defended the way the European Central Bank handles monetary policy.
Mr O'Neill said last Thursday he was "mystified" by Europe's belief that it would emerge unscathed from the US economic downturn and made plain he wanted the ECB to follow the example of the US Federal Reserve and cut interest rates.
Asked if the ECB would remain on the right side of the fence on monetary policy, Solbes said, "The ECB is always on the right side".
He added "We have decided to have an independent institution, which is formed by the governors of the central banks, experienced men who know how to manage monetary policy. They do very well and they have more information."
The European Commission publishes its economic forecasts for 2001-2002 on Wednesday. Mr Solbes declined to detail the forecasts but said growth was expected to remain robust above trend potential in 2001 and 2002.