ECB Press Conference: No Mention Of You-Know-Who

• The Governing Council decided to leave the key ECB interest rates unchanged
• The Euro-system continues to provide liquidity support to the banking system of the euro area at very favorable conditions, thereby facilitating the provision of credit to the euro area
• The Governing Council will continue to implement the gradual phasing-out of the extraordinary liquidity measures.
• In order to counter effectively any threat to price stability over the medium to longer term, the liquidity provided will be absorbed when necessary.
• Over recent quarters, the euro area has continued to benefit from the significant macroeconomic stimulus provided and the measures adopted to restore the functioning of the banking system
• Available indicators suggest that the economic recovery in the euro area is on track, although it is likely to remain uneven
• The Governing Council expects real GDP growth to remain moderate in 2010
• Annual real GDP growth in a range between 0.4% and 1.2% for 2010 and between 0.5% and 2.5% for 2011
• Compared with the Euro-system staff projections published in December 2009, the range for real GDP growth in 2010 is slightly narrower, while for 2011 the range has been revised slightly upwards,
• Confidence may improve more than expected, and both the global economy and foreign trade may recover more strongly than projected
• There may be larger than anticipated effects stemming from the extensive macroeconomic stimulus being provided and from other policy measures taken
• Concerns remain relating to a stronger or more protracted than expected negative feedback loop between the real economy and the financial sector, renewed increases in oil and other commodity prices
• Euro area annual HICP inflation was 0.9% in February 2010
• Inflation is expected to be around 1% in the near term and to remain moderate over the policy-relevant horizon
• Annual HICP inflation in a range between 0.8% and 1.6% for 2010 and between 0.9% and 2.1% for 2011
• The annual growth rate of M3 turned slightly positive in January 2010, rising to 0.1%
• The latest data support the assessment that the underlying pace of monetary expansion is moderate and that, in the medium term, the inflationary pressures associated with monetary developments are low
• The negative annual growth of loans to the private sector conceals ongoing opposite developments: positive, strengthening annual growth in loans to households on the one hand and negative, declining annual growth in loans to non-financial corporations
• Banks have continued to reduce the size of their overall balance sheets over the past few months, but the challenge remains for them to manage this adjustment while ensuring the availability of credit to the non-financial sector
• High levels of public deficit and debt place an additional burden on monetary policy and undermine the Stability and Growth Pact as a key pillar of Economic and Monetary Union
• Consolidation of public finances should start in 2011 at the latest and will have to exceed substantially the annual adjustment of 0.5% of GDP set as a minimum requirement by the Stability and Growth Pact

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