ECB sees rising risks to eurozone economy
- 6 June 2012
- From the section Business
European Central Bank (ECB) president Mario Draghi has said risks to the eurozone economy have increased.
He warned of "heightened uncertainty weighing on confidence and sentiment".
But he said governments needed to act to solve the debt crisis. "It is not right for monetary policy to fill other institutions' lack of action," he said.
Some had hoped that he would signal a new round of long-term loans to banks - a policy which is seen as having avoided a new credit crisis in Europe.
Under this three-year loan programme, the ECB injected 1tn euros ($1.25tn; £800bn) into the financial system in February and December 2011.
He said that, despite the continuing crisis in the eurozone, there was no guarantee that such a move would be effective if the problems were due to government policy, rather than a lack of liquidity.
"Some of the problems in the euro area have nothing to do with monetary policy," he said.
But he said that banks would continue to have access to all the short-term liquidity (one week, one month or three months) they wanted through fixed-rate ECB loans until at least 15 January next year.
He had previously said that the unlimited funds would be available until 10 July.
Mr Draghi also said that the decision by the ECB to leave eurozone rates unchanged at 1% had not been unanimous, with some members backing a rate cut.
Access to funds
Earlier, official figures had confirmed that the eurozone recorded zero growth in the first three months of the year.
The ECB also released its latest quarterly economic forecasts of growth and inflation.
Its growth forecast for 2012 was unchanged at a range of between -0.5% and 0.3%, and there was some surprise among analysts that the prediction had not been cut.
The inflation forecast was narrowed from between 2.1% and 2.7% to between 2.3% and 2.5%.
The euro fell against the dollar during Mr Draghi's news conference, on the news that the decision to keep rates on hold had not been unanimous, but then recovered.
European stock markets also fell back as Mr Draghi spoke, but then regained the ground they had lost.