VIENNA May 12 Inflation in Europe will probably
stay below 1 percent for an extended period, European Central
Bank Vice President Vitor Constancio said on Monday.
"The burden of servicing the debt and reducing the debt
ratio, when nominal (economic) growth is so low, it's a possible
cause of drag," he told a conference on banking union in Vienna
when discussing lower growth and inflation in Europe versus
levels in the United States.
"We just have to look that since mid-2012 - when inflation
was well above 2 percent in Europe - until now when it is indeed
below 1 and very likely will stay below 1 for quite some time,
the effect of the appreciation of the euro during this period
explains the reduction in a inflation rate by 0.5 percentage
points," he added.
(Reporting by John O'Donnell and Michael Shields)