(CEP News) Frankfurt - The European Central Bank will use the manoeuvring room it has with its key policy rate and bring it lower to help spur growth and lift the economy out of its current recession, ECB member Axel Weber said at a German Marshall Fund conference in Brussels.

Rates are at 1.5% in the euro area and heading down, Weber said on Sunday. We are using the room that we have to manoeuvre.

Weber, also the President of Germany's Bundesbank, added that the ECB has taken steps beyond reducing rates to combat the current crisis. We've put in as much monetary stimulus in the short period of time as central banks in the U.S. and the UK, the policy-maker said.

The central banker also dismissed talk that growing risk premiums on some euro zone government bonds, due to expanding budget deficits and public debt, could lead to some euro zone states defaulting. Talk of long-term problems with euro zone sovereign debt and fiscal budgets is just a lot on nonsense, Weber said. There is no sustainability problem whatsoever. It's a pricing issue.

Furthermore, Weber said the ECB's response to the economic crisis has not been inflationary and that the central bank is aware of when to start implementing an exit strategy. We are an independent central bank and we know exactly when to start tidying up.

Also speaking at the same conference in the Belgian capital on Sunday, EU Monetary Affairs Commissioner Joaquin Almunia said governments in the European Union need to roll back fiscal stimulus spending when the economy finally recovers.

We need to have an exit strategy, Almunia said. We need to have the political commitment to withdraw the fiscal stimulus, and also the monetary stimulus once the recovery will start.

Written by CEP News European Staff, eunews@economicnews.ca, edited by Stephen Huebl, shuebl@economicnews.ca