The European Central Bank left its main interest rate unchanged at a historic low of 1 percent on Thursday and took the first steps to withdraw some of its extraordinary liquidity support now that recovery is under way.
Bank President Jean-Claude Trichet told reporters at his regular news conference that the economy of the 16 countries that use the euro will grow at a moderate pace next year, but that the recovery would be “uneven and subject to risks” as firms try to shore up their finances in the wake of the most savage recession in generations.
Trichet said the current rate was “appropriate” — an indication that interest rates won’t change anytime soon — and the decision to keep borrowing costs unchanged was unanimously agreed by all members on the governing council.
But given that the recession in the eurozone has ended — figures earlier confirmed that the eurozone economy grew by a quarterly rate of 0.4 percent in the July-September quarter — Trichet said the ECB could start unwinding some of the extraordinary liquidity measures that were introduced to prevent the collapse of the banking system. (AP)
