The European Central Bank's decision to reduce interest rates to record lows last week was necessary to prevent the risks of too-low inflation, the German member of the ECB's six-member executive board said on Sunday. "The low interest rates are justified," Sabine Lautenschlager said in an interview Sunday with radio broadcaster Deutschlandfunk. "The fact is that the growth we see in the euro zone as a whole is too moderate not to want to generate a growth spurt with low interest rates." The ECB lowered its main lending rate Thursday by 0.10 percentage point to 0.05%. It cut a separate rate on bank deposits deeper into negative territory, to -0.2% from -0.1%. In June, the ECB became the largest central bank to experiment with a negative rate on bank deposits, a measure aimed at encouraging banks to lend surplus to other financial institutions rather than paying to park them at the ECB. The central bank also announced it will purchase covered bank bonds and bundled loans known as asset-backed securities and said further details will be released in October. The ECB enacted these measures amid heightened concerns that inflation is too low in Europe, a threat to an already fragile economy. Annual consumer-price growth in the euro zone was just 0.3% in August, far lower than the ECB's target of just below 2%. Ms. Lautenschlager is one of two German members of the ECB's 24-member governing council. Her support for the rate cut is notable because the other German member, Bundesbank President Jens Weidmann, opposed the stimulus moves. He preferred to gauge the effects of new bank loans before taking new measures, a person familiar with the matter said Thursday. Ms. Lautenschlager, a former top Bundesbank official, rebutted concerns in Germany that the ECB's easy-money policies are punishing the country's savers by reducing the rates they earn on bank deposits. This isn't simply an issue for Germany, she said, but for the 18-member euro zone more broadly. "We do not decide monetary policy for Germany alone--this is very important," she said. "You cannot save money if you do not have work," she said. "And if the economic environment is ultimately so weak that economic growth cannot be generated, then the ECB has to think: How can I ensure that economic growth is generated, that inflation is rising...How can I ensure that jobs are safe and remain secure, or that new jobs can be created?" Interest rates will not increase as long as economic conditions remain as they are, Ms. Lautenschlager said. At the same time, the ECB has now arrived at the lower limit on rates, she said, repeating comments made by ECB President Mario Draghi on Thursday. source