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German finance minister sees signs ECB will raise rates

German Finance Minister Wolfgang Schaeuble listens to a news conference in the Greek ministry of finance in Athens July 18, 2013. REUTERS/Jo
German Finance Minister Wolfgang Schaeuble listens to a news conference in the Greek ministry of finance in Athens July 18, 2013. REUTERS/Jo

BERLIN (Reuters) - German Finance Minister Wolfgang Schaeuble said in a newspaper interview on Friday the European Central Bank (ECB) has made clear it will raise interest rates again once the economy improves and that he welcomed that prospect.

"Low rates are above all an expression of insecurity on debt markets. That cannot last forever - even if it is a relief to the federal budget," he said. "The central bank has announced it will raise rates again when the economy improves. That is good."

ECB chief Mario Draghi actually said after the last meeting on rates on August 1 that rates will remain low for some time. The ECB has based this 'forward guidance' on the inflation outlook remaining subdued, and growth weak.

"The Governing Council confirms that it expects the key ECB rates to remain at present or lower levels for an extended period of time," Draghi said after the ECB's August 1 meeting.

But some economists said the absence of a discussion among ECB council members about cutting rates contrasted with the previous month and could be seen as a modestly hawkish signal.

(Reporting by Stephen Brown; Editing by Paul Carrel)

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