The European Central Bank's Governing Council after responding to mounting market pressure and speculation of a rate cut last meeting voted unanimously this meeting to maintain the benchmark interest rates at 1.0% in order to balance between boosting growth and controlling inflation since the bank's main objective is maintaining financial stability.
Draghi said at the ECB press conference that ongoing tensions keep damping economic activity, while the euro-area region still has substantial downside risks; however, the president explained that he sees tentative signs of stabilization in the economy. Regarding inflation, the president said that inflation outlook remains broadly balanced.
In regards to the fiscal compact between European nations, the president said the compact must have unambiguous wording, while governments must implement bold structure reforms, as he said that ambitious policies should support nations to restore confidence.
Draghi said that the long-term refinancing operation have been an effective policy measure, where this policy provided liquidity insurance to banks and prevented a possible major funding constrain. In addition, the loans were pumped successfully to the economy as they came in the right time, as the president explained.