Brussels, 05/09/2013 (Agence Europe) - On Thursday 5 September, the European Central Bank decided to leave interest rates unchanged but: “If money market developments were to be judged unwarranted in their impact on our assessment of medium-term inflation, then such an instrument should be considered,” said ECB president Mario Draghi. The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.50%, 1.00% and 0.00% respectively. Draghi said that the ECB's monetary policy would continue to be accommodative for as long as was necessary, information that is part of the “forward guidance” strategy recently introduced at the ECB. In a unanimous decision by the Governing Council, forward guidance must remain qualitative.
The European Central Bank has adjusted its growth forecasts for the eurozone for 2013 and 2014 on the June 2013 forecasts. It expects eurozone growth to recede by 0.4% of GDP in 2013, rather than 0.6%, but to grow by 1% in 2014 (rather than 1.1%). Inflation is expected to be 1.5% in 2013 and 1.3% in 2014.
Draghi clarified the comments made the day before by a member of the ECB Executive Board, Jörg Asmussen, who said that the supervisor would be able to decide on his or her own when a bank is no longer viable. The Commission unveiled draft legislation earlier in the summer for a single bank resolution mechanism (see EUROPE 10884). Draghi said that wires had been crossed and explained: “The supervisor makes the assessment, hands this to the resolution authority (nowadays the government) which decides what to do.” Asked about the talks with the European Parliament on the single bank supervision system, he said he expected there to be good news over the next few days. The Parliament will be voting next week. Earlier that morning, the head of Eurogroup said that the supervisory system would be up and running in October 2014. Draghi said the ECB would communicate in mid-October on the quality of bank assets.
Commenting on Greece, the Draghi said the situation was very clear: “If an extension of the programme is needed, it will require further conditionality,” which is not what Greece would like to hear. Asked whether the ECB would be prepared to be involved in a write-off of Greek debt, the answer was no. (EL/transl.fl)