ECB Puts Easing on Hold

The European Central Bank (ECB) has halted its aggressive rate-cutting policy, responding to “tentative” signs that the rapid deterioration of the euro zone economy is running out of downward momentum.

But Mario Draghi, who has already twice supervised a reduction in rates since becoming president in November, at the height of the euro zone debt crisis, hinted that the ECB may need to cut rates again — warning that the outlook “remains subject to high uncertainty and substantial downside risk.”

In more normal economic times, Draghi’s Thursday comments on the euro zone economy would have seemed bleak indeed. Rather than calling an end to the bloc’s slump, Draghi merely said there were “tentative signs of stabilization activity at low levels.” However, his latest assessment of the euro zone outlook, made after the ECB’s monthly rate-setting meeting, was at least less unremittingly bleak than in December and November.

Jens Søndergaard, European economist at Nomura in London, said, “Today’s decision to keep rates unchanged was the right one in our view. The economic data signal an economy that’s contracting but not collapsing.” The ECB’s benchmark interest rate is 1 percent – 0.5 percentage points lower than when Draghi became president on November 1.

The strongest evidence that the euro zone economy is stabilizing comes from the closely watched purchasing manager surveys by Markit, the information company. They suggest that although output shrank in December for the fourth straight month, the pace of decline slowed. The euro zone has been buoyed by the strong performance of Germany, its largest economy, whose labor market is still strong. Survey data suggest its economy may already have returned to growth in December, after briefly dipping.

也有hopeful signs that financial markets have begun the new year in a calmer mood. Yields on government bonds across the euro zone have fallen. The FTSE Eurofirst 300 index of euro zone stocks has consistently traded at above 1,000 for more than a week, after plunging below 900 in the second half of last year on economic fears.

In particular, Thursday’s successful auction of Spanish bonds helped push down yields in a country where only weeks ago borrowing costs had escalated to the point at which analysts feared a forced bailout by other euro zone member states. Spain managed to sell almost €10bn of three- and four-year bonds — twice the government’s maximum target — at lower rates than in the recent past. This pushed the yield on Spanish ten-years down by 16 basis points to 5.18 percent.

Draghi made clear on Thursday that he saw the becalming of financial markets as crucial to recovery, saying, “Ongoing financial market tensions continue to dampen economic activity in the euro area.” Businesses have slashed investment, and consumers have trimmed spending, while they wait for the euro zone’s economic future to become clearer.

许多分析师认为，德拉奇的12月决定为欧元区银行提供紧急三年贷款，作为财务条件恢复的关键。投资者对银行的偿付能力的信心 - 因此，欧元区金融市场一般 - 在欧洲央行借出前所未有的489亿欧元以上的银行后提升。该行动让担心批发银行资金将再次冻结，因为它在2008年雷曼崩溃之后。

Draghi周四承认，在12月21日的融资运营之前，持续的财务状况如何持久。他说，一些“无抵押债券市场”，即“重新打开”以来“完全被关闭”。Draghi得出结论，“时间越多......我们看到的迹象越多，它已经存在有效的政策措施。”

But despite the success of Draghi’s December financing coup, many economists still expect the euro zone to return to recession this year —damaged by the corrosive effect of the euro zone debt crisis on business and consumer confidence.