Tuesday April 21, 2015 Search
Weather | Athens
14o C
09o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
ECB to keep interest rates low as European economy revives, says central bank official

By Jeff Black

The European Central Bank will keep interest rates low as the economy picks up because the regions economic output is still below potential, according to Executive Board member Sabine Lautenschlaeger.

The output gap we acknowledge by our forward guidance, Lautenschlaeger said in an interview in the Wall Street Journal. Interest rates will remain at the present level, or even lower, over a longer period of time and well into the recovery.

The comments represent an extension of the Frankfurt-based ECBs pledge on interest rates, known as forward guidance, and distill arguments made by President Mario Draghi last week for the first time. Even as output data improve in the 18-nation region, the ECB is signaling it wont tighten monetary conditions too soon and choke off the recovery.

Were receiving some positive signals from incoming data, for example economically with a modest recovery trend and financially with improving funding conditions for banks, Lautenschlaeger said, adding that the central bank still has measures it can use, like asset purchases or negative interest rates, to stimulate growth.

After the ECB kept its interest rates on hold on March 6, Draghi said that while policy makers hadnt seen a need to act now, they agreed that monetary conditions need to remain loose as the recovery grips, because of the existing slack in the economy.

While the recovery remains fragile, data in the past four weeks have been encouraging. Gross domestic product in the bloc climbed 0.3 percent in the fourth quarter, more than economists predicted and bolstered by stronger expansions in Germany, France and the Netherlands. Italy also returned to growth.

Economic forecasts released by the ECB last week, which covered 2016 for the first time, predicted that inflation should be around 1.7 percent by the end of that year. Thats near the central banks goal of just below 2 percent and more than double last months rate of 0.8 percent. It projected growth will firm to 1.8 percent in 2016 from 1.2 percent this year.

Well act if it is necessary, Lautenschlaeger said. But there was no strong reason to act: Last week we, the Governing Council, found our baseline scenario broadly confirmed.

[Bloomberg]

ekathimerini.com , Tuesday March 11, 2014 (11:14)  
Euro-area debt levels surge to record, led by Greece
ECB studying curbs on Greek bank support
Greek markets slide on reports ECB planning to restrict bank funding
Pension and lump sum cuts to be frozen
UN urges Europe to put asylum at center of Mediterranean debate
GENEVA - The UN refugee agency on Tuesday urged European leaders to do more to help Greece and Italy cope with the migrant crisis in the Mediterranean and to put protection of people at the ...
More than 120 migrants reach Greek shores, a day after fatal sinking
Greek authorities have picked up more than 120 migrants who illegally entered the country by sea on three separate vessels, a day after a yacht with 90 people on board foundered just off the...
Inside News
BASKETBALL
Panathinaikos recovers to beat CSKA for 2-1
Three-pointer master Panathinaikos had the last laugh at the end of Game 3 of its series with CSKA Moscow on Monday winning 86-85 and reducing the Russians' lead to 2-1 in the best-of-five p...
GYMNASTICS
Petrounias wins gold in Europeans
Lefteris Petrounias won his first gold medal in a European Artistic Gymnastics Championship on Saturday finishing first in the rings at Montpellier in France. Petrounias was impeccable in th...
Inside Sports
COMMENTARY
Tragedy in the Mediterranean
Every time we in the West see yet another video of an atrocity committed by Islamic State or Boko Haram and express our abhorrence, and every time we are shocked to read of a boatload of mig...
EDITORIAL
Silence is not an option
There is no shortage of politicians, lobbyists and unionists from the center right who have backed the government, whether tacitly or explicitly. Naturally, when it was first elected, the go...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
RECENT NEWS
1. UN urges Europe to put asylum at center of Mediterranean debate
2. More than 120 migrants reach Greek shores, a day after fatal sinking
3. Greek municipalities outraged by state move to use funds
4. EU proposes doubling rescue effort, schedules crisis meeting on Thursday
5. Greek PM to meet German chancellor on sidelines of immigration meeting
6. Euro-area debt levels surge to record, led by Greece
more news
Today
This Week
1. Greek government's popularity takes a hit as talks drag on
2. Two men accused of migrant smuggling face prosecutor over deadly shipwreck
3. Tragedy in the Mediterranean
4. Silence is not an option
5. No ferries on Labor Day as seamen take industrial action
6. ECB studying curbs on Greek bank support
Today
This Week
1. Quarantine for Greek bank subsidiaries in neighboring countries
2. Greek finance ministry hits back at German newspaper report
3. Time to get serious
4. Putting off payments led to Q1 budget primary surplus
5. Obama calls for flexibility in Greek reform talks in brief exchange with Varoufakis
6. Greece denies report that it is preparing for debt default
Find us ...
... on
Twitter
... on Facebook
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright 2015, H KAΘHMEPINH All Rights Reserved.