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ECB meeting : Mario Draghi will go down as a zero-interest-President in the history of

The interest rate in the Euro area remain low. This is certainly the case until the end of 2019, as Mario Draghi, the President of the European Central Bank (EC

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ECB meeting : Mario Draghi will go down as a zero-interest-President in the history of

The interest rate in the Euro area remain low. This is certainly the case until the end of 2019, as Mario Draghi, the President of the European Central Bank (ECB) announced on Thursday after the meeting of the monetary policy Council. "The Council is widely believed that the key ECB interest rates to remain at least through the end of 2019 at the current level," said the Italian in Frankfurt.

in addition, the Central Bank is the banks starting in September, new loans for two years of the grant. So they replaced similar loans as of 2020 and after due. Background of the decisions, the weakening of the economy in the Eurozone and the fact that the inflation rate slow to the ECB's target Rate of just under two percent approaches. Draghi stressed, however, that the Council considers the probability of a recession as "very low".

economists now expect the record-low key interest rate of zero percent increases for all, at the earliest, in the course of the year 2020, and then only gradually. Also the Deposit interest rate of minus 0.4 percent, the banks for deposits at the ECB have to pay, is not likely to be changed in this period. So will have to settle for savers for a long time with small interest, borrowers and potential homebuyers can, however, continue to very cheap financing.

so Far, the Central Bank had emphasised that interest rates would not increase until the summer and until September. New long - term loans, the so-called Tltro -had previously been only speculated.

The economy is not growing fast enough

Background of the according to Draghi by all members of the Council unanimously supported decisions is the weakening of the growth and slowly rising inflation rate. Also, Bundesbank President Jens Weidmann, therefore, stands behind the decision. The new forecasts the ECB, the economy is growing in the Eurozone this year to just 1.1 percent in 2020 and then to 1.6, and a year later to 1.5 per cent.

In December was 1.7 percent for 2019 and 2020 is assumed. Background, stressed Draghi, further existing uncertainties, the unresolved trade conflicts, the Brexit and the economic slowdown in China and other emerging countries. Overall, the risks are increased. "Our steps will increase the resilience of the Eurozone".

At the same time, you should bring the inflation rate to the front. Here, too, the ECB is sceptical again. For 2019, it now expects only 1.2% (previously 1.6%). Also in 2020 and 2021 should rise the prices in the Euro-zone average of only 1.5 percent and 1.6 percent weaker than the previous forecasts. Thus, the target of just under two percent, the monetary authorities banned the Deflation is safe and price stability see, to respect, more out of reach.

Draghi will not increase interest rates

Draghi stressed that the banks ' lending to companies and households is increasing, wages are rising, the labour market has improved and financing conditions are favourable. But the Council wants to make it still more effective to prevent. Therefore, to be provided starting in September, the banks in the Eurozone in the three months to March 2021 new targeted lines of credit, with a maturity of two years.

About the volume of the ECB will decide about possible incentives for banks to take advantage of these credit lines. The interest rate on the new loans will be tied to the applicable Prime rate, is likely to be among the first shops in September at zero. "These new stores will contribute to maintaining favorable lending conditions of the banks and to the smooth Transmission of monetary policy", Draghi is also convinced.

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Rolf Obertreis

With the recent decisions of the ECB governing Council is that the Central Bank will not raise interest rates in the term of office of Draghi. The Italian retires after eight years on a rotational basis as the President of the ECB at the end of October. A successor is likely to be after the European elections in may, decided. Bundesbank President Weidmann is regarded as the ideal candidate. However, he has little chance, because the Federal government relies on the fact that the CSU MEP Manfred Weber as the successor of Jean-Claude Juncker President of the EU Commission. Two Germans in these two positions would be the EU-partners, probably to convey.

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