The European Political Newspaper
May 04, 2012, 06:34
EU UPDATE
ECB to keep interest rates unchanged
EPA/BORIS ROESSLER
This afternoon (3 May) the European Central Bank (ECB) is expected to announce a hold of its main interest rate at the current level of 1%, but analysts expect that the ECB will soon proceed to a reduction of at least one quarter unit to 0.75% in view of the worsening economic climate, with the peripheral members states of the Eurozone one after the other entering in official recession.
The ECB's governing council is now meeting in Barcelona following the rule that twice a year it holds its meeting outside Frankfurt.
Debt-ridden Spain proceed this morning to an auction of government debt paper and raised €2.5 billion at only slightly higher interest rates, in view of the expected announcement by the ECB's governor Mario Draghi that Eurozone's central bank is seeing the money zone's economy slowing down.
Such a reference will be translated into a premonition that the ECB will further reduce its interest rates soon, a prospect meaning better times for commercial banks. Given this, all the major stock exchanges of Europe started the day higher, driven by the banks.
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