Brussels, 02/06/2005 (Agence Europe) - The Governing Council of the European Central Bank (ECB) decided on Thursday to leave euro zone interest rates unchanged, at the same level as for the last two years. The minimum tender rate applied to key refinancing operations therefore remains at 2%, that for the marginal lending facility at 3% and that for the deposit facility at 1%. This “unanimous” decision by the Governing Council can be explained, according to Jean-Clmaude Trichet, by the “appropriate” and “optimal” level of current rates. “Despite a certain moderation compared to the record level noted last year”, the world economy should remain strong and thus continue to support exports from the euro zone, the ECB president told the press. Also, the current inflation rate (2% in May) is in line with the ECB's medium-term objective, Mr Trichet points out, noting that the underlying inflationary pressure has remained “contained”. The ECB nonetheless reviewed its quarterly growth forecasts for the euro zone down slightly, and they now stand at between 1.1% and 1.7% in 2005 and between 1.5 and 2.5% in 2006.
Jean-Claude Trichet, who had asserted that he only foresaw a victory of the yes-vote at the referendum on the European Constitution, told the press on Thursday, in response to questions on the French and Dutch referendums, that it was above all a question of “confidence building”. He refused, however, to make any comment on the fall in the euro after the French “no”. Also, when asked about the risk evoked in the German press about a failure of economic and monetary union, he associated himself with the declarations of the German finance minister, Hans Eichel, and of the Bundesbank President, Axel Weber, saying: “I do not comment on an absurd question”.
Speaking to Europeans, Mr Trichet said: “It is time to consume, you can be sure that we shall safeguard your purchasing power”. At the same time, he wanted to fuel the confidence of entrepreneurs, saying the “environment is very favourable”. Recognising that price stability was “not a sufficient condition and that reform is needed above all”, Mr Trichet explained that the detailed reforms Member States are to present in the autumn in their national action plans will be “vital for Europe's capacity to meet the challenges resulting from (…) the global division of labour, rapid technological changes and population ageing”.