The central bank kept its benchmark interest rate at a record low of 0.5
percent on Thursday, which had been expected after recent economic
indicators showed the euro zone economy was beginning to recover, albeit
weakly. But Mr. Draghi said the bank had not ruled out future rate
cuts.
“We certainly are alert to the geopolitical risks that may come from the Syrian situation,” he added.
Mr. Draghi’s remarks were unexpectedly pessimistic and could dampen the
hopes of some economists and political leaders that the euro zone is
finally improving after a stubborn recession that has pushed
unemployment to more than 25 percent in Spain and Greece.
The central bank also revised its forecast for euro zone growth in 2014 to 1 percent from 1.1 percent.
The bank may not welcome undue optimism about the euro zone economy
because it could cause market interest rates to rise and make credit
even more unaffordable for the businesses and households in Southern
Europe that need it most.
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