–Adds Comments on Economic Outlook
BARCELONA, Spain (MNI) – The European Central Bank Governing
Council did not discuss any specific proposal to lower interest rates at
its meeting Thursday, ECB President Mario Draghi said.
“We didn’t discuss any specific move on interest rates,” Draghi
told journalists after the Council’s external meeting here. “We
certainly discussed our general monetary policy stance, which we found
accommodative in view of an economic outlook which becomes more
uncertain.”
Responding to a question, Draghi said that any talk of an exit
strategy would be premature and said that the Council was unanimous on
this point. He reiterated that “we never precommit” to rate changes.
Draghi rejected the idea that the ECB was “tweaking” its monetary
policy language or stance. “We’ve discussed quite extensively the
monetary policy stance. We found it accommodative. Both nominal
interest rates are low, real short-term interest rates are negative in
all Eurozone countries. No one would deny that liquidity remains
abundant.”
Draghi said that risks to the outlook for inflation remained
“broadly balanced”, with upside risks emanating from commodities and
indirect taxes and downside risks from weaker than expected economic
activity.
The ECB chief rejected suggestions the Eurozone was in recession,
stressing the “divergences” across economies.
“On the Eurozone level, there are huge divergences: countries that
are not at all in recession, nearly at full employment, and some
countries that are in recession,” he said. “We basically think that the
indications we had in April are not enough for us to change our baseline
scenario that calls for a recovery towards the end of the year.”
Ahead of the press conference, some analysts had expected Draghi
to be more dovish, given the erosion in leading indicators like the PMI
polls. But he said only that prospects for recovery were more uncertain
and promised a more concrete assessment next month.
“I think we saw stabilizing of economic activity at low levels
in the first three months,” he said. “The survey data shows uncertainty
prevailing. We will be clearer in our assessment next month when we have
more data.”
–London Bureau; Tel: +44 207 8627492; email: ukeditorial@marketnews.com
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