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16 Dec 2013
ECB's Draghi: Recovery in the Eurozone still fragile
FXstreet.com (Łódź) - Speaking before the European Parliament on Monday ECB president Mario Draghi stated that the economic recovery in the Eurozone was still fragile and that inflation in the area could stay low for a prolonged period of time.
Draghi reiterated that ECB's key interest rates would remain at current or lower levels for an extended period of time, adding that “adjusting interest rates is not always sufficient to maintain price stability.” As Jamie Coleman immediately commented on FXBeat: “Did he just open the door to QE? Sounds like it!”
Draghi also assured that the central bank would be continue closely monitoring money market conditions an that it was ready to consider all available instruments.
Furthermore, the ECB head said that economic data pointed to slow growth in the fourth quarter of the year, emphasizing however that later on output should improve thanks to the strengthening of domestic demand and a gradual rise in export demand. But the risks to the outlook remain on the downside due to “uncertain developments in global money and financial market conditions.”
As far the Single Resolution Mechanism is concerned, the ECB president urged the European officials to reach an agreement on the issue by the next Ecofin meeting.
“We should not create a Single Resolution Mechanism that is single in name only,” he said. “In this respect, I am concerned that decision-making may become overly complex and financing arrangements may not be adequate. I trust that the European Parliament, together with the Council, will succeed in creating a true Banking Union.”
Draghi reiterated that ECB's key interest rates would remain at current or lower levels for an extended period of time, adding that “adjusting interest rates is not always sufficient to maintain price stability.” As Jamie Coleman immediately commented on FXBeat: “Did he just open the door to QE? Sounds like it!”
Draghi also assured that the central bank would be continue closely monitoring money market conditions an that it was ready to consider all available instruments.
Furthermore, the ECB head said that economic data pointed to slow growth in the fourth quarter of the year, emphasizing however that later on output should improve thanks to the strengthening of domestic demand and a gradual rise in export demand. But the risks to the outlook remain on the downside due to “uncertain developments in global money and financial market conditions.”
As far the Single Resolution Mechanism is concerned, the ECB president urged the European officials to reach an agreement on the issue by the next Ecofin meeting.
“We should not create a Single Resolution Mechanism that is single in name only,” he said. “In this respect, I am concerned that decision-making may become overly complex and financing arrangements may not be adequate. I trust that the European Parliament, together with the Council, will succeed in creating a true Banking Union.”