Uncertainty remains high and with risks oriented to the downside. Mario Draghi expresses caution at the opening of the press conference after the decision to keep the cost of money unchanged at 1% (the marginal rate also unchanged at 1,75% and that on deposits at 0,25%). But there are "signs of downward stabilization of economic activity" and "we continue to think that economic activity will gradually recover in the euro area in 2012 thanks to developments in global demand, low interest rates and the measures taken to support of the financial sector".
Measures such as the unlimited three-year refinancing of banks decided in December by Eurotower which, explained Draghi, "are making a substantial contribution to improving the financing situation of European banks". And on the EBA, whose president Andrea Enria was in a hearing in the Chamber yesterday, reiterating the pressure on the recapitalizations strongly contested by the trade associations (the ABI confirmed that it is studying the appeal to the European Court of Justice), he said : the exercise "was right" but was decided at "a different moment from the current one" in relation to the prices of government bonds and the economic conditions, thus ending up being cyclical and increasing the difficulties of the banks.
According to Eurotower forecasts, inflation will remain above 2% for several months, before falling below 2%. But to resolve the sovereign debt crisis from which the risks remain, it is necessary "to urgently launch the new fiscal compact which for Draghi" must be clear and unambiguous about the rules. And it could be signed by January.
After Monti and Barroso, the president of the ECB also returns to the theme of the ESM bailout fund, which "must be strengthened urgently". On the other hand, according to Draghi, markets should appreciate the strong progress made by some euro area states in restoring public budgets.
However, the Eurotower is of great concern Hungary, where the new legislation, which "is not in keeping with the spirit of the treaties", limits "the powers of the local central bank". Draghi also expressed his displeasure with the president of the Swiss central bank Philip Hildebrand for transactions related to the buying and selling of currencies but also noted that the ECB's code of ethics includes rules that prevent similar cases.
