German Government Seeks To Allay Fears Of Inflation

BERLIN (AP) -- The German government is trying to allay domestic fears of runaway inflation after hints by the central bank that it would soften its conservative monetary policy.

Comments by Bundesbank officials earlier this week were interpreted by economists as a major shift in the central bank's postwar stance.

Finance Minister Wolfgang Schaeuble told reporters Thursday that prices could rise by up to 3 percent.

This prompted mass-market daily Bild to front its Friday edition with the headline "Inflation Alarm!," invoking Germany's post-World War I national trauma of rampant inflation.

But Foreign Minister Guido Westerwelle says price stability is a "core concern" of the government.

He told parliament Friday that even with Europe badly in need of growth "the printing of money can't be an answer."


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