New stimulus package introduced by ECB

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Growth was uneven across eurozone countries, with Germany
euro

Growth was uneven across eurozone countries, with Germany "robust" and France losing ground ?The European Central Bank is preparing to launch a new monetary stimulus programme, with ECB chief Mario Draghi warning Thursday that the eurozone economy is slowing just as global risks to the region’s growth prospects are increasing.

Draghi said the bank was “intensifying preparations” for a new programme to boost economic growth by buying up government bonds and private and public assets, which would also form part of a quantitative easing policy.

The ECB “stands ready with a programme that would help to strengthen our accommodative monetary stance by injecting money into the economy,” Draghi told a press conference in Frankfurt.

He was speaking after the ECB kept its benchmark refinancing rate at a record low of 0.15 per cent and its deposit rate below zero as it sized up the impact to the currency bloc of the slew of measures it announced in June aimed at heading off the threat of deflation and spurring bank lending.

“There has been a slowing down in the growth momentum,” Draghi said, describing the 18-member currency bloc’s recovery from a protracted recession as “weak, fragile and uneven.”

Also looming over the economy’s prospects are a series of crises around the world – including in Syria, Iraq, Libya, Gaza and, in particular, the economic Cold War unfolding between the West and Russia over Ukraine.

The risks “are more heightened than they were a fewer months ago,” said Draghi, adding that the stand-off between the West and Russia could potentially have “more impact on the eurozone than other parts of the world.”

This could have ramifications for energy prices and global demand for eurozone products, the ECB chief said.

But he said: “It is very hard to assess what impact there might be once the sanctions and counter sanctions are taken.”
Source: GNA

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