The European Central Bank is ready to go beyond the record interest rate cut it agreed to last week if it is needed to prop up the eurozone's stagnant economy, its president Mario Draghi said Monday. "We will be looking at all the data that arrives from the euro area economy in the coming weeks and if necessary, we are ready to act again," Draghi said in Rome where he was receiving an honorary degree from the Luiss university.
The ECB on Thursday cut its benchmark refinancing rate to a historic low of 0.5 per cent. Draghi said interest rates on private banks' deposits, currently at 0 per cent, might be taken into negative territory.
More had to be done to revive growth and create new jobs, he said, adding that "in some European countries (unemployment) has reached levels that undermine confidence in decent life prospects and risk triggering extreme and destructive forms of protest." His comments come days after the European Commission predicted a rise in eurozone unemployment to 12.2 per cent in 2013, peaking at 27 per cent in Spain and Greece.
The EU executive also forecast that output in the currency bloc was, for the first time, facing two consecutive years of recession, with gross domestic product expected to shrink by 0.4 per cent this year after falling by 0.6 per cent in 2012.
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