Brussels, 04/12/2003 (Agence Europe) - On Thursday the European Central Bank (ECB) decided to keep its interest rates unchanged. The minimum bid rate applied to main refinancing operation therefore remains at 2%. The two floor and ceiling rates in which it is fixed, as well as the deposit facility rate and that for marginal lending facility loans remain at 1% and 3% respectively. The ECB believes that current monetary policy is helping to ensure medium term price stability.
During a press conference, the President of the ECB, Jean-Claude Trichet confirmed that the Euro zone was expecting gradual recovery in growth over the next quarterlies. Recovery should be stronger in 2004 and 2005, he predicted. According to the ECB annual inflation rates should fluctuate around 2% over the next few months and a gradual and limited fall is expected to follow. Trichet indicated that the ECB's Board of Governors had also debated the possible consequences of the eminently regrettable events of the Ecofin Council of 25 November, (suppression of the proceedings against Germany and France for their budget deficits) which "risked undermining the credibility of the institutional framework" and the "confidence in health public finance in certain Member States of the Euro zone". Mr Trichet insisted on the need to respect bot the budgetary framework of the stability and growth pact but also Article 104 of the treaty that included provisions for avoiding excessive deficits.
In responding to the press, Mr Trichet said that with the stability pact: "we stick to our analysis as calmly as we possibly can". Asked about the Commission's declaration on adapting the pact, he declared that "'We are the ECB" and that they were playing their role even if it is "boring"; according to Trichet growth in the EU could be encouraged by consumption and investment which was "gradually picking up"; interest rates: citizens of the Euro zone have benefited from historically low interest rates, he stressed, which obviously wishing to anticipate the evolution of the rates (just as he had refused to comment on the relation between the dollar and the Euro). He thought it essential now to preserve confidence and not only encourage stability but also create an environment that helped create jobs. In order to achieve this, it was absolutely necessary to carry out the promised structural reforms, he said (but was less insistent than his predecessor, Wim Duisenberg).