The European Central Bank hailed a "normalisation" in financial market conditions as its governing council voted to keep rates on hold, signalling confidence that the eurozone would stage a gradual recovery from recession later in the year.
While cautioning that risks to growth “remain on the downside” in the eurozone, Mr Draghi started the year in upbeat mood, checking off a list of indicators of financial stress that had improved since the middle of last year when fears of a euro break-up peaked.
The rate decision had been unanimous, the ECB chief said, a significant change from the last meeting in December when he spoke of a “prevailing consensus” on the 23-strong governing council to keep rates on hold.
Mr Draghi made clear the bank felt it had done its part in creating the conditions for a recovery, but growth depended on Europe’s politicians pressing ahead with action to cut budget deficits and improve competitiveness through structural reforms.
“The risks to an economic recovery stem essentially from lack of action from the governments”, he said. “Structural adjustment, to regain competitiveness, to create a situation where you don’t have a permanent creditor and lots of permanent debtors – that’s where action is needed and will continue to be needed for the foreseeable future.”
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