MNI: BuBA's Dombret Cautions Against Protectionist Measures

By Christian Vits

     FRANKFURT (MNI) - Bundesbank Board member Andreas Dombret warned Monday

against increasing protectionist measures and pleaded for more international

cooperation.

     "I think it is vital to acknowledge that, even with some degree of

divergence, we should not forget how important it is to remember the

repercussions for global and national financial stability if we do not

cooperate," Dombret said in a speech in Washington. "This sometimes means that

we should accept solutions that are not in our immediate interest."

     "This concerns not least the issue of protectionism. Naturally, structural

change poses a daunting challenge to the industrialised world, too," Dombret

continued. "However, protective tariffs are not the right answer, as they

harbour the threat of countermeasures that could spiral into a trade war -- one

that would ultimately only produce losers and one that I give an urgent warning

of," he added.

     While going it alone may seem like a particularly sophisticated approach

for some countries, it will ultimately turn out to be rather short-sighted,

according to Dombret.

     "I am confident that the new German government will strengthen the

rule-based, fair approach to trade policy in the European Union and globally,"

he concluded.

--MNI Frankfurt Bureau; +49 69 97782671; email: christian.vits@marketnews.com

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