NICOSIA, March 5 The European Central Bank will focus on improved growth prospects at a news conference on Thursday after its policy meeting, and unveil some but not all the details of its 1 trillion euros-plus bond buying plan.
Below are highlights of ECB President Mario Draghi's comments at the news conference.
ON EMERGENCY LIQUIDITY ASSISTANCE FOR GREEK BANKS
"We have raised ELA today ... by 500 million euros."
"ELA is a decision of the national central bank of Greece to which the governing council may decide to object with a very special and demanding majority requirement if certain conditions are not in place.
"One condition is that ELA can be given to solvent banks with adequate capital. Now the Greek banks at the present time are solvent, their capital levels are well above the minimum requirements and that's positive news. A lot has been done by Greece to strengthen its banking system ... so today the Greek banking system is solvent and is key to provide credit to the Greek economy.
"It's absolutely essential that this solvency be maintained because that is the pre-condition for the ECB to be able to allow ELA and therefore financing to the economy ...
"The most important thing we can do today is to preserve the solvency and robustness of the Greek banking system ... to this extent, the ECB has asked the Eurogroup members to make sure that the recapitalisation fund of something around 10 billion euros be readily available to face any sudden negative contingency that might materialise now."
ON BUYING GREEK BONDS
"Right now the ECB cannot buy Greek bonds ... for a variety of reasons" (because Greece is in a review period, because it cannot at the moment waive the investment-grade rating requirement and because its existing holdings are more than 33 percent of outstanding Greek debt).
"But as soon as Greece repays the SMP bonds that are due in July or August -- and if the waiver were to be reinstated of course -- we would be able to buy Greek bonds via this new purchases securities programme."
"The waiver would have to be reinstated and we are ready to do so as soon as these conditions are in place."
ON ECB LENDING TO GREECE
"Let me first say something that is not entirely known. The ECB up to today has lent to Greece 100 billion euros, and more exactly has doubled its lending from 50 billion euros to 100 in the last ... two months.
"The lending to Greece today is 68 percent of the Greek GDP, which is the highest in the euro zone. So in this sense one can really say that the ECB is the central bank of Greece. But it's also the central bank of the other countries and it's a rule-based institution.
"The ECB is the first to wish to re-start the financing to the Greek economy provided the conditions are in place, and the conditions are that a process which suggests a successful completion of the review be put in place quickly. That is the condition and we will certainly welcome such a development."
"We stand ready to reinstate the (Greek collateral) waiver as soon as we are able to make the positive assessment of the likelihood of a successful completion of the review."
"In particular, in order to increase investment, boost job creation and raise productivity, both the decisive implementation of product and labour market reforms and actions to improve the business environment for firms need to gain momentum in several countries. It is crucial that structural reforms be implemented swiftly, credibly and effectively."
NO CHANGE TO QE PLAN
"We see no reason to think, or plan, or act, in any different way than what we planned, namely 60 purchases of 60 billion euros a month of securities until September 2016 or beyond, if needed."
Asked about raising the limit on Greece's issuance of short-term debt limit, Draghi said the ECB was prohibited by European rules from direct or indirect financing of governments.
"The ECB is a rule-based institution. It is not a political institution."
INFLATION TO RISE LATER IN 2015
"Supported by the favourable impact of our recent monetary policy measures on aggregate demand, the impact of the lower euro exchange rate and the assumption of somewhat higher oil prices in the years ahead, inflation rates are expected to start increasing gradually later in 2015.
"This assessment is also broadly reflected in the March 2015 ECB staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 0.0 percent in 2015, 1.5 percent in 2016 and 1.8 percent in 2017."
ECB STAFF PROJECTIONS UPGRADED
"This assessment is also broadly reflected in the March 2015 ECB staff macroeconomic projections for the euro area, which foresee annual real GDP increasing by 1.5 pct in 2015, 1.9 pct in 2016 and 2.1 pct in 2017.
"Compared with the December 2014 Eurosystem staff macroeconomic projections, the projections for real GDP growth in 2015 and 2016 have been revised upwards, reflecting the favourable impact of lower oil prices, the weaker effective exchange rate of the euro and the impact of the ECB's recent monetary policy measures."
"The latest economic data and, particularly, survey evidence available up to February point to some further improvements in economic activity at the beginning of this year. Looking ahead, we expect the economic recovery to broaden and strengthen gradually."
GOVT DEBT PURCHASES
"They are intended to be carried out until the end of September 2016 and will, in any case, be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2 percent over the medium term.
"Further information on certain implementation aspects of the public sector purchase programme will be released at 3.30 p.m. CET (1430 GMT) on the ECB's website."
NO GROUNDS FOR COMPLACENCY
"A cyclical recovery along the lines of March staff projections is no ground for complacency."
"The Governing Council will continue to monitor closely the risks to price stability."
"We will on 9 March 2015 start purchasing euro-dominated public sector securities in the secondary market. We will also continue to purchase asset-backed securities and covered bonds which we started last year."
CYPRUS CENTRAL BANK GOVERNOR CHRYSTALLA GEORGHADJI ON CAPITAL CONTROLS:
"I can assure you it is the view of the finance minister and government, and governor that the very few capital controls that are still in place will be very soon lifted, before the end of the first quarter of the year."
(EMEA MPG Desk, +44 207 542 4441)