Brussels, 11/07/2003 (Agence Europe) - Given positive inflation levels, the European Central Bank (ECB) on Thursday decided to keep rates unchanged. The minimum bid rate applied to main refinancing operations will therefore remain at 2% and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 2.00%, 3.00% and 1.00% respectively. In his introductory speech, Mr Duisenberg President of the ECB explained, "We have concluded that the current monetary policy stance is appropriate" given the positive perspectives for price stability in the medium term. In a reply to journalists, he suggested that the ECB would exclude any modification of short term monetary policy and explained that he did not know how much longer they would remain on this route but that it could last for a very long time.
Mr Duisenberg commented on the following themes
-monetary policy: interest rates in the Euro Zone, "are historically low, both in nominal and real terms". He explained that he believed this to constitute "support to economic activity".
growth: the President of the ECB explained that the latest data still suggests that economic growth in the Euro zone remained sluggish in the second quarter after having practically stagnated during the first quarter. He explained that available indicators suggested stabilisation in activity while there was still no sign of greater confidence or increased production. He asserted that, "preliminary signs are that we have reached the bottom there and that confidence may be returning at last". According to Duisenberg, the return in optimism on the markets constituted "the first signs of optimism".
- inflation: Mr Duisenberg repeated that, medium term perspectives remain favourable" and that for the end of the year inflation rates on an annual trend are expected to waver around the current level or around 2%.
- Level of Euro on currency markets: He declared that they had "with a certain relief" notice that the strong rise in the Euro over recent months appeared to have stopped for the instant.
-Call on Member States: in the current context, characterised by sluggish economic growth and a low level of confidence, "structural reforms and stable and reliable budgetary polices respecting the pact are of a high priority".
- European Constitution: Mr Duisenberg indicated that the ECB would develop a recommendation on the paragraphs on the end of September, therefore before the beginning of the Intergovernmental Conference. A "High Level Task Force" organised by the ECB Board of Governors has been put in charge of preparing this recommendations. For the time being, the ECB has only mentioned procedure and has therefore not mentioned anything about substance. He added that he had written two letters to the Present of the Convention, Valéry Giscard d'Estaing. In his letter of 5 June, Mr Duisenberg explains that the Board of Governors is asking for the new constitutional treaty to exclude any significant amendments to the current provisions at the ECB or to the European Central Banking System (ECBS): "In order to preserve the current framework of the monetary area", the Board of Governors proposes: to include a reference to price stability in Article 1-3 in the Union's objectives; to put the description of Articles 1-29 in agreement with the current provisions of the treaty; to develop procedures on participation of the European Parliament; to preserve the prerogatives of the ECB in the areas relating to its competency, in the framework of external representation of the Euro Zone and adapt its provisions on convergence criteria.