ECB brings good tidings to European business community
Last week, the European Central Bank (ECB) announced that interest rates would remain at the current all-time low and that it is prepared to spend up to EUR 1 trillion on purchasing bonds and pumping liquidity into eurozone banks.
Last week, the ECB emphasised that interest rates in Europe will remain record-low for a very long time. Mario Draghi, ECB President, also underlined that the central bank is prepared to spend up to EUR 1 trillion on purchasing bonds and providing banks with liquidity should it prove necessary. According to Danske Invest's chief analyst, Bo Bejstrup Christensen, the ECB statement bodes well for European businesses.
“The outcome of the meeting of the Governing Council should benefit eurozone businesses and be supportive of economic growth in the region. In that regard, the outcome of the meeting was quite positive, clearly signalling a very lenient monetary policy for a very long time, which also implies that interest rates will remain extremely low,” said Mr Christensen.
Ahead of the meeting, the media had been running stories criticising Mario Draghi's leadership style, causing some concerns over possible divisions within the ECB. Allegedly, Mr Draghi was pursuing a go-it-alone style. However, in the press release issued after the meeting and at the press meeting, it was emphasised that the Governing Council unanimously supports the decisions that have been made. Furthermore, it was agreed that the ECB will take additional measures should it prove necessary.
“Surprisingly, Mr Draghi reacted to the critical media coverage by emphasising that the Governing Council is unanimous. This goes to show that he wishes to emphasise the display of unity in the ECB,” said Mr Christensen.
The ECB released its statement following a number of soft indicators and a disconcertingly low rate of inflation.
