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Euro zone may need lower rates: ECB member
April 4, 2014 / 5:56 PM / in 4 years

Euro zone may need lower rates: ECB member

PARIS (Reuters) - Euro zone countries are experiencing a recovery but lower interest rates may be needed to nurture it, European Central Bank executive board member Benoit Coeure told France’s Le Figaro newspaper on Friday.

Benoit Coeure, executive board member of the European Central Bank (ECB), speaks during an interview with Reuters in Frankfurt February 12, 2014. REUTERS/Ralph Orlowski

“The markets anticipate an economic recovery,” he said in an interview published on the newspaper’s web site. “At the ECB we consider that the recovery has already arrived, but we know it to be gradual and fragile. We therefore want to accompany it with low, indeed lower interest rates, over a prolonged period.”

He said the ECB did not see further quantitative easing measures as necessary for the time being but added: “We will continue to follow developments very closely and will act if necessary.”

On Thursday, the ECB opened the door to possibly turning on its money-printing presses to boost the euro zone economy and keep inflation from staying too low.

It kept interest rates steady at 0.25 percent at its regular meeting, but ECB President Mario Draghi said the central bank had achieved unanimity that asset purchases, also known as quantitative easing, might be needed to tackle inflation if it proved persistently low.

Coeure, a French national, also said France must respect its commitments to Europe with regard to reducing its deficit. “It’s a question of credibility, and of confidence,” he said.

France’s reshuffled government lost no time on Thursday in indicating that it will seek to renegotiate its deficit-reduction deadline with the European Commission, setting it on a collision course with its EU partners.

France had previously promised to bring its public deficit under the EU treaty limit of 3 percent of national income in 2015.

Reporting by Andrew Callus; Editing by James Regan and Janet Lawrence

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