ECB Leaves Monetary Policy Intact


FRANKFURT, Germany (UPI) — The European Central Bank left its interest rates unchanged Thursday on the prediction that the economy would remain weak and inflation above the target rate.

“Owing to high energy prices and increases in indirect taxes in some euro area countries, inflation rates are expected to remain above 2 percent in 2012,” ECB President Mario Draghi said during a news conference.

Draghi acknowledged that the central bank’s bond-buying program announced in September has “helped alleviate … tensions over the past few weeks, thereby reducing concerns about the materialism of destructive scenarios.”

However, he said, economic growth “is expected to remain weak” in the 17-nation currency region that uses the euro.

Draghi said the bank was also “ready” to initiate its bond-buying program, termed Outright Monetary Transactions, which will target short-term bonds of countries struggling to climb out of debt that have also requested aid from the European Stability Mechanism.

“The Governing Council will consider entering into OMTs to the extent that they are warranted from a monetary policy perspective as long as program conditionality is fully respected,” Draghi said.

In so many words, the European Central Bank expects to purchase bonds from countries that comply with terms set up by the European community for international rescue loans.

UPI - United Press International, Inc.

Since 1907, United Press International (UPI) has been a leading provider of critical information to media outlets, businesses, governments and researchers worldwide.

Join the Discussion

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.