(8 February 2010 – Europe) The European Central Bank has left its key interest rate unchanged at 1 percent for the ninth month running.The European Central Bank president, Jean-Claude Trichet, said that the recovery process is likely to be uneven and the outlook remains subject to uncertainty.
Mr Trichet also said that the outcome of the monetary analysis confirms the assessment of low inflationary pressure over the medium term. Price stability is expected to be maintained over the medium term, thereby supporting the purchasing power of euro area households.
Medium to longer-term inflation expectations remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2 percent over the medium term, Mr Trichet added.
Speaking on the Greek government’s attempt to reign in its borrowing, the bank’s president also said that it is ‘absolutely crucial’ that the Greek government sticks to its plans to get their budget deficit down.
The Central Bank expects and is confident that the Greek government will make all the necessary decisions that will permit them to reach that goal, Trichet said.
Greece’s budget deficit reached a whopping 12.7 percent of the country’s GBP in 2009 and now the government has the heavy task of reducing it down to below three percent before 2012.
Mr Trichet also said it was the responsibility of every member government to get their borrowing levels under control as escalating debt levels are adding a burden onto monetary policy.