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ECB stability

policy must

be clear: Tietmeyer

FRANKFURT: Bundesbank president Hans Tietmeyer said on Tuesday that the future European Central bank must be equipped with a solid strategy to combat inflation.

In a speech to bankers, Tietmeyer said "Since this will be a new institution, initially it will be only with great uncertainty that economic agents can assess the real inflation preference of those holding responsibility for the euro."

Tietmeyer said the selection of countries participating in the launch of the European single currency will help market participants form conclusions about the fledgling central bank's desire for stability.

But the European central bank would have to acquire much of its credibility through its own efforts.

"A clear and convincing approach can help to build up as quickly as possible its reputation as a central bank which is committed to stability," Tietmeyer said.-Reuter