Key quotes from ECB head Draghi's press briefing
FRANKFURT, Germany (AP) — At his monthly news conference following the European Central Bank's policy-setting meeting, President Mario Draghi on Thursday answered questions from reporters.
Here are some highlights of the things he said:
— ECONOMIC GROWTH
The ECB cuts its forecast for economic growth in the 17-country eurozone next year. Draghi said growth will remain weak as financial uncertainty keeps companies and households from spending and governments and banks focus on reducing debt.
"The economic weakness in the euro area is expected to extend into next year."
The ECB aims to keep the inflation rate in the eurozone close to but below 2 percent. The rate has remained stubbornly above that for months and only recently began falling — it was 2.2 percent in November. Draghi said inflation should continue to ease
"Inflation rates have been elevated for some time. More recently they have declined, as anticipated, and are expected to fall below 2 percent in 2013."
— BANKING UNION
Draghi said he expects the European Union leaders to reach a deal soon on creating a new central banking supervisor for the bloc. The leaders failed to agree on the supervisor's setup last week and will try to reach a deal at a summit next week.
"I am very confident that we will reach an agreement."
— BORROWING RATES
The ECB decided to keep its interest rates on hold despite evidence that the eurozone economy, which is in recession, is weakening further. Draghi said the ECB had already done much to lower some interest rates with its plan to buy the bonds of indebted countries that ask for financial help. Though it hasn't been used yet, the plan has already led to a drop of as much as 2 ½ percentage points in some countries' borrowing costs, just on anticipation by bond investors.
"That is much more than you can achieve by a cut in the policy rate."