April 25, 2012
Mario Draghi, European Central Bank president, has struck a distinctly gloomy note on eurozone growth prospects, dropping previous references to a gradual recovery this year.
Speaking in the European Parliament, Mr Draghi said recent signs of weakness shown in survey data highlighted “prevailing uncertainty” about the outlook for Europe’s 17-country monetary union. But he did not signal a shift in ECB interest rate strategy, which he said remained “accommodative” – or supportive of growth.
His comments followed the political backlash this week against fiscal austerity measures taken by governments across the eurozone and purchasing managers’ indices that indicated the eurozone had fallen deeper into recession.
Earlier this month, Mr Draghi had said he expected the eurozone economy “to recover gradually in the course of the year” – but the phrase was not included in his prepared text on Wednesday.
Nevertheless, Mr Draghi still expected ECB action to support eurozone banks to eventually stimulate growth. In December and February, the ECB injected more than €1tn in three-year loans into the eurozone banking system.
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