- Vitor Constancio, ECB Vice President
The Euro zone is trying hard to rebound to its pre-crisis peak, struggling with such problems as a slower growth rate, slump in bank shares as well as refugee crisis. The Euro area's economy grew at an annual rate of 1.1% in the final quarter of 2015, less than it was in the run-up to the 2008 global financial crisis. The European Central Bank responded to the crisis by cutting its key interest rate to negative 0.3% in December and extending its bond-buying programme of 60 billion euros a month until March 2017. However, investors were left disappointed as they were anticipating deeper rate cuts and additional asset purchases.
ECB Vice-President Vitor Constancio said that a lack of confidence in getting inflation pressures higher could cause the central bank to deliver more stimulus as soon as next month. However, the decision has not been made yet. With the risks to the downside, Mr. Constancio still believes that the Euro zone's economy continues to recover. The official highlighted that while European-area growth might be tepid it would be worse without the ECB's actions, which have helped to lower borrowing costs and boost growth. Nevertheless, Mr. Constancio admitted that it is quite possible that the European economy will soon see data showing negative inflation readings, given the recent shock of more energy price drops.
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