“The improvements in the financial markets should continue and have positive effects on the real economy. This should lead to a gradual recovery in the second half of the year”. The president of the ECB reiterated this today, Mario Draghi, in the press conference following the last board meeting of the institute. The Governing Council kept the key eurozone rate at an all-time low of 0,75%.
“Budget adjustments in the public and private sector are needed – continued Draghi -, but there is still a downside risk: domestic demand could be weaker than expected due to insufficient implementation of structural reforms in the Eurozone, which could affect confidence e delay the recovery".
As for price trends, “in the medium term, increases should remain contained, in line with expectations and price stability in the medium and long term”. Finally, "a more flexible remuneration scheme is needed to support employment".
As for the solution adopted in favor of Cyprus, according to Draghi it demonstrates that "we are able to face crises without them becoming systemic and jeopardizing the existence of the euro". And the President of the Eurogroup "was misunderstood" when he spoke of a model strategy. Of course, the hypothesis of a forced withdrawal even on bank accounts of less than 100 thousand euros "wasn't a smart idea", but fortunately "it was corrected the next day and did not come back".
On the other hand, Draghi stressed that the European Central Bank "cannot replace the lack of capital in the banking system", despite having already adopted some extraordinary measures which instead have had a significant positive effect on the unblocking of bank credit in some countries, such as the possibility for banks to use loans to businesses as collateral (collateral) to obtain refinancing from the ECB itself.
