- Title: Euro zone recovery to continue thanks to ECB stimulus, Draghi says
- Date: 28th November 2016
- Summary: BRUSSELS, BELGIUM (FILE) (REUTERS) STATUE SYMBOLIZING EURO CURRENCY OUTSIDE EU PARLIAMENT BUILDING
- Embargoed: 13th December 2016 15:57
- Keywords: EU ECB European Central Bank Draghi Easing Stimulus Parliament
- Location: BRUSSELS, BELGIUM
- City: BRUSSELS, BELGIUM
- Country: Belgium
- Topics: European Union,Government/Politics
- Reuters ID: LVA0035AD0GI5
- Aspect Ratio: 16:9
- Story Text: European Central Bank President Mario Draghi said on Monday (November 28) the euro zone recovery has withstood economic and political uncertainty and its recovery is expected to continue, partly thanks to the European Central Bank's monetary stimulus.
"The euro area economy continues to expand at a moderate but steady pace, despite the adverse effects of global economic and political uncertainty. This gradual upward trend is expected to continue, not least owing to our monetary policy measures," Draghi told an EU Parliament committee.
He added the global economy is expected to continue its recovery, although growth will remain slower than before the crisis, adding the global economy is facing significant political and economic uncertainties.
"Growth will remain slower than before the (2008 Economic) Crisis. While showing signs of resilience, the global economy is facing significant political and economic uncertainties. In this context, one of the key take-aways from the 2016 World bank/IMF Annual meetings was that monetary policy cannot be the only game in town. It cannot generate sustainable and balanced growth on its own," Draghi said.
Draghi said the European Central Bank would decide at its December 8 meeting on the continuation of its stimulus programme, effectively quashing speculation about a delay in the decision to January.
"Let me just restate in answering your question. Let me just restate that at our monetary policy meeting in December, we'll assess the various options that would allow the Governing Council to preserve the very substantial degree of monetary accommodation necessary to secure the sustained convergence of inflation towards levels below or close to two percent over the medium term. So we'll have to wait," Draghi said.
The ECB has bought more than a trillion euros of euro zone government bonds in a bid to shore up economic growth and inflation in the euro zone. For the most part the bank is holding these bonds.
With the stimulus programme coming to an end in March, the ECB Governing Council wants to decide whether or not to continue purchases beyond the end of the programme and ensure they can still find enough bonds to buy.
Any decision on bond lending might not be finalised in December and will depend on what other changes the ECB makes to its asset-purchase program.
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