European Central Bank officials showed no sign of bending to renewed international pressure to do more to boost the eurozone's struggling economy. Top ECB policymakers, attending the International Monetary Fund's spring meetings, politely but firmly rebuffed the IMF's call that the bank should cut its policy interest rate below 1 percent and be prepared to provide more public funding to banks to reduce the risk of a new flare-up of the crisis.
"It's a free world, we take note of this, but let me say that none of the advice of the IMF has been discussed by the Governing Council, in recent times at least," ECB President Mario Draghi told a news conference on Friday.
And the ECB delegation to Washington had nothing to say, at least publicly, about a fresh suggestion by US Treasury Secretary Timothy Geithner that the ECB had a role to play in helping European economies through tough reforms ahead.
"We think we have done our task in the last months by quite a number of standard and non-standard measures we have taken," ECB executive board member Joerg Asmussen said on Friday on the sidelines of the IMF meetings. He said the ball was now in the court of eurozone governments, which are trying to narrow budget deficits and undertake other reforms to restore market confidence and generate growth.
Unlike the US Federal Reserve, which pursues full employment as well as low inflation, the ECB's marching orders are to focus on keeping price growth in check, a point underscored by ECB officials several times over the weekend.
The Fed may yet provide more stimulus, on top of its near-zero interest rates and the $2.3 trillion in bonds it has already bought, even though the US economy is stronger than Europe's. Economists polled by Reuters expect growth in the euro area to shrink by 0.4 percent in 2012 and to stay in a mild recession until the third quarter as weakness in Italy, Spain and Greece outweighs the stronger performance of regional powerhouses Germany and France.
"The stance of our monetary policy is fully appropriate," ECB Vice President Vitor Constancio said in a speech. "It's appropriate to the situation and the prospects that we (face) right now."
The pressure on the ECB in Washington to do more to help growth contrasted with concerns among many policymakers from the 17-nation eurozone that their unprecedented stimulus to date could spark inflation when the region's economies regain health.
ECB officials said they have met their responsibilities by lowering interest rates to 1 percent and providing two rounds of long-term loans to banks to prevent a credit crunch. Bundesbank President Jens Weidmann said there was no shortcut for the ECB to restore market confidence.
"You cannot solve structural problems in the economy with instruments of monetary policy," Weidmann said.
His counterpart at the Bank of France, Christian Noyer, also pushed back at the notion of the ECB as the saviour of Europe.
"There is a tendency among certain market participants and certain policymakers to consider the central banks as universal problem solvers whose balance sheet can be used without cost for all sorts of purposes," he told an audience in Washington.
Nonetheless, he suggested the ECB would be in no rush to return to normality.
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