ECB will no longer accept Greece's bonds, inflation to pick up

The European Central Bank poured cold water on Greece's attempts to find support overseas to fix the country's finances. The central bank said that it would no longer accept Greece's bonds as collateral  or monetary operations starting next week. This means that Greek banks will not be able to use their bonds for cash funding from other banks. Instead the Greek central bank will have to provide banks with billions of euros of emergency funding. Thus, the Greek government is now under even greater pressure to prepare a realistic and viable economic recovery plan in order to get the debt restructuring, as the country is expected to run out of cash in three-week time. Meanwhile, the European Commission's winter economic forecast suggests that all EU member states will grow again this year, with the economic output picking up moderately in both the EU and Euro zone, before accelerating further in 2016. The Euro zone's economy is seen growing 1.3% throughout this year, by expanding at a 1.9% rate in 2016. Concerning inflation, the ECB predicts that the Euro area's HICP inflation is likely to stay very low or negative in the coming months. However, consumer prices are expected to rise gradually later in 2015 and in 2016, supported by the central bank's monetary policy measures. Peter Praet, the ECB Executive Board member, said that the current EUR/USD exchange rate better reflects the divergence between the US and Euro zone economies.