Bloomberg News

Draghi Sees ‘Tentative Signs’ of European Economy Stabilizing

January 12, 2012

(See EXT4 for more on Europe’s debt crisis.)

Jan. 12 (Bloomberg) -- European Central Bank President Mario Draghi said there are some signs the euro-area economy is stabilizing.

“According to some recent survey indicators there are tentative signs of stabilization of economic activity at low levels,” Draghi said at a press conference in Frankfurt today after the ECB kept its benchmark interest rate at 1 percent following two straight reductions. “The economic outlook remains subject to high uncertainty and substantial downside risks,” he added.

With the euro area on the brink of a second recession in three years, some signs of economic resilience have given the ECB room to assess the impact of its stimulus measures to date, which include injecting a record amount of cash into the banking system. The central bank may be pressed back into action soon if looming budget cuts and a credit shortage prove too powerful for the economy to withstand.

--With assistance from Gabi Thesing and Svenja O’Donnell in London and Jeff Black and Jana Randow in Frankfurt. Editors: Fergal O’Brien, Andrew Atkinson

To contact the reporter on this story: Matthew Brockett in Frankfurt at mbrockett1@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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