In trying to 'best guess' just what Duisenberg's problem is, the Economist may inadvertently have picked up on an important clue:
In a little-noticed remark at the end of the press conference called to discuss the policy changes, the ECB's president, Wim Duisenberg, put his foot in his mouth once again. In a comment that seemed to come from the heart, he said: "In the 16 years that I was the governor of the central bank of the Netherlands, there were two years in which we had deflation of ½%. I publicly declared then that I lived in a central banker’s paradise."
That is not a view shared by most economists, who believe that deflation would mark a dangerous new twist in Germany’s declining economic fortunes. Mr Duisenberg’s comments will have brought no comfort to the chancellery in Berlin.
Source: The Economist