Key quotes from ECB head Draghi's press briefing
FRANKFURT, Germany (AP) — At his monthly news conference following the European Central Bank's policy-setting meeting, President Mario Draghi on Thursday answered questions from reporters.
Here are some highlights of the things he said:
— INTEREST RATES
The ECB cut its key refinancing rate to 0.5 percent from 0.75 percent as the economy in the 17-country eurozone weakened and inflation eased. Draghi said the ECB will remain ready to act, suggesting another rate cut is possible.
"We'll look at all the incoming data, we'll monitor them closely, and we'll stand ready to act if needed."
— OTHER MEAURES
Draghi suggested the ECB is open to other measures to support the flow of credit in the eurozone. Draghi suggested the ECB could bring its deposit rate — what it charges banks for deposits — below zero. That means that banks would have to pay to deposit money overnight with the ECB.
"We are technically ready. We will look at this with an open mind."
— ECONOMIC GROWTH
Draghi said one of the reasons for the interest rate cut was evidence that the economic slowdown was now affecting the region's bigger and stronger economies. He said the rate cut should support a mild recovery.
"Euro area economic activity should stabilize and recover gradually in the second half of the year."
The official measure of inflation dropped sharply to 1.2 percent in April, well below the ECB's target of 2 percent. Draghi said the drop was mainly due to lower energy costs but said weak economic activity was also contributing.
"Inflation rates could remain subject to some volatility throughout the year."
Many European governments and independent economists have said in recent weeks that public sector budget cuts should be slowed or even halted to allow the economy to recover. Draghi said the ECB continued to support debt reduction. Though he did not specify whether it would be good to slow down the pace of austerity, he said governments should not allow public debt to increase back to unsustainable levels.
"Don't unravel the progresses that you have achieved."