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23 Sep 2013
ECB's Draghi sees gradual recovery in the Eurozone
FXstreet.com (Barcelona) - Speaking before the European Parliament's Committee on Economic and Monetary Affairs, ECB president Mario Draghi said that the economic situation in the Eurozone should continue improving gradually, supported by a boost in domestic demand.
Draghi pointed out however that unemployment in the area was still excessively elevated, inflation remained subdued and credit conditions continued to be weak, which could weigh on the recovery. In order to prop it up, the ECB would maintain its accomodative monetary policy for as long as necessary. The euro fell to the lows of the day when Draghi repeated that he expects “the key ECB interest rates to remain at present or lower levels for an extended period of time.”
The central bank head stressed the importance of the Outright Monetary Transactions program, which although never activated, “prevented risks of destructive scenarios with potentially severe challenges for price stability in the euro area.”
He also added that growth friendly fiscal consolidation should be top priority for Eurozone. He recognized the improvements in the Portuguese economy, and urged the country to step up the privatization process. As far as the question of a third bailout for Greece is concerned, Draghi declined to comment, saying that any speculation would be 'premature'.
Draghi pointed out however that unemployment in the area was still excessively elevated, inflation remained subdued and credit conditions continued to be weak, which could weigh on the recovery. In order to prop it up, the ECB would maintain its accomodative monetary policy for as long as necessary. The euro fell to the lows of the day when Draghi repeated that he expects “the key ECB interest rates to remain at present or lower levels for an extended period of time.”
The central bank head stressed the importance of the Outright Monetary Transactions program, which although never activated, “prevented risks of destructive scenarios with potentially severe challenges for price stability in the euro area.”
He also added that growth friendly fiscal consolidation should be top priority for Eurozone. He recognized the improvements in the Portuguese economy, and urged the country to step up the privatization process. As far as the question of a third bailout for Greece is concerned, Draghi declined to comment, saying that any speculation would be 'premature'.