26th Feb 2015 06:04
VIENNA (Alliance News) - The quantitative easing will support economic activity and help to take inflation back towards the target of below, but close to, 2% over the medium term, European Central Bank President Mario Draghi said in the European Parliament on Wednesday.
Further, Draghi defended the central bank action on Greece. "We are ready to reinstate the waiver when the Governing Council decides that the conditions for successful conclusion of the program are in place," he said.
"As in the case of the existing purchases of private sector securities, the purchases of public securities have a high transmission potential to the real economy," Draghi said. "We have already seen some positive effects of our measures."
Financial conditions in money and bond markets throughout the currency bloc have eased further. Moreover, lending rates to households as well as firms decreased considerably and loan dynamics continued to recover, Draghi added.
Inflation in the euro area has been on a continuous downward trend. In an environment of weak economic recovery and subdued credit developments, risks of falling inflation expectations to feed back into weakening actual inflation were high, Draghi noted.
The central bank faced with heightened risks of too prolonged a period of too low inflation, the ECB said in the minutes of the monetary policy meeting held on January 22.
Copyright RTT News/dpa-AFX