The ECB is ready for "further decisive measures" if they are necessary. Mario Draghi said this in the press conference after the board meeting on interest rates which have been left unchanged. The Eurotower closely follows the trend of market rates, is ready to take other initiatives with determination "to maintain sufficient liquidity in the Eurozone" and maintains an accommodative monetary policy stance, with the forward guidance of last July which envisages interest rates in the euro area at their current level or lower for an extended period of time.
On the drop in inflation in the Eurozone to 0,8% in December Draghi noted that it was "widely expected". However, the medium-term outlook for inflation has worsened. Thus, in reinforcing rate guidance, Draghi used more aggressive language. “I want to be clear – he added – we have a mandate to defend price stability in both directions”. The ECB is ready to use all the instruments allowed by the treaties, within the scope of its mandate aimed at ensuring price stability both upwards, by fighting excessive inflation, and downwards, i.e. against a inflation too low. The ECB expects rates to remain at their current low levels also in the coming months, with the Eurozone probably facing a prolonged period of low inflation but subsequently the inflation rate should gradually return towards the ECB's target, at reduced but below 2%.
According to ECB estimates, the Eurozone should also have closed the fourth quarter of last year with a positive growth rate, confirming that the recovery will be slow and should continue at this pace in 2014 and 2015. However, the ECB president invited to caution. “I would be very, very cautious” to say that the crisis is defeated, he said, reminding once again that the recovery is still weak and there are many risks.
Draghi also commented on the US administration's position asking Germany to increase domestic demand to stimulate Eurozone growth: "My advice is: continue in your performance which has been a success and address the investment weakness if necessary" .
If Draghi reassures that he is ready to act, he does not yet say with what tools. And he does not lift the veil on the possibility or otherwise that the ECB will directly purchase securities such as the Fed. "I will not go into details - he said - we have a mandate to ensure price stability in both directions and the governing council is ready to use all tools".
