In the usual press conference following the decision to keep rates steady at 1.0% ECB President Mario Draghi reiterated the assessment for the economy assuring signs of stabilization with downside risks to growth outlook and upside pressure to inflation over the short term with balance risks to the outlook.

Draghi reiterated the upside risk from rising energy prices and impact on general price levels and that the ECB will closely watch the transmission of price rises to wages and general prices.

The president assured that the emergency measures remain temporary in nature yet assured that it is early to talk about the exit of those measures considering the risk to the growth outlook and even if the president noted the support to banks and signs of stability after the provided LTROs.

Draghi said bank financing has improved yet stressed on the need to build strong balance sheets and also asked government to implement strong reform and respect the fiscal treaty pact.

In his comments he also tried to downplay the fear of a two-way recovery train in the euro area that might downplay the effectiveness of a central monetary policy by the ECB; the president said that the monetary policy is administered for the euro area as a whole and it is the role of the national central banks to administer other measures to ensure growth and competitiveness at a national level.

Investors saw the comments as downbeat with the risks to the downside for the growth outlook and the recovery that remains at a moderate pace, especially after Draghi said that the risks remain with renewed tension in debt markets, which shows that the ECB is indeed not out of the picture and the economy is still not out of the woods and no near term exit is seen for the unconditional measures taken.