Accusations of political intervention and worries about the future independence of the European Central Bank have been flying around.

So did the various national banks do it, or were they pushed? Was it necessary to cut rates for economic, political, or "psychological" reasons?

Looking at the political reasons first, there is no doubt that all European Union governments, with the possible exception of Ireland, where the economy is buoyant, would like to see growth in the economy and a fall in unemployment.

Inflation is of no concern as it is currently running at a mere 1% within the eurozone, well within the target range of 0-2%.

So the temptation for governments to put pressure on their banks to make the cut must have been quite strong. Indeed Oscar La Fontaine has been accused in the newspaper Frankfurter Allgemeine of very publicly calling for interest rate cuts by the Bundesbank. The French government has also been keen for a cut.

Bounced into a cut?

But would these calls by left of centre governments, eager to placate a population wanting better times, be enough to have "bounced" the banks into a cut?

The European Central Bank President Wim Duisenberg says no. He maintains the reason could be justified purely on economic grounds. If governments can see a slow economy and a lack of confidence, so can the banks, and it is "equally in their interest to restore confidence among consumers and business and boost growth and investment", he said.

Need for cuts foreseen

He also said that the need to cut rates had been seen by the European Central Bank for some time.

Indeed, he added, the fact the ECB was aware of the keenness of Lafontaine and others to see interest rates come down almost delayed the actual implementation of the cut. "The political pressures that arose in the meantime only made it rather difficult to actually do something, because it does create a certain stubbornness in the minds of central bankers. We have consciously decided to demonstrate our independence."

This is a fair point, especially in Germany where the Bundesbank has always fiercely defended its separation from government and its ability to decide for itself what interest rates should be.

However, there is a third possible reason for the move - a "psychological" one.

The launch of the euro is now only three weeks away and the timing could have been better given the global problems in the economy.

Eurozone countries naturally want the euro to launch with a fizz and get off to a good start, and lowering rates now, before it comes into effect, will give the ECB time to settle in.

The bank of France's Jean Claude Trichet, speaking in the French newspaper Le Monde, said the cut was for this reason.

"The rate cut was the "symbolic" birth of the euro" were his exact words.

Courting popularity

Also the euro is not universally popular within the eurozone, with many Germans for example not wanting to lose the Deutschmark.

By reducing interest rates in time for the launch of the euro, perhaps the banks were trying to show the population that they are interested in low rates, growth and employment.

The reality of why the decision is made is probably more economic than political.

Of course the politicians wanted the cut, just because economic factors suggested it was necessary. However the ECB is independent and it would be doubtful if it would risk succumbing to political pressure.