FRANKFURT, Germany – At his monthly news conference following the European Central Bank's policy-setting meeting, President Mario Draghi on Thursday answered questions from reporters.
Here are some highlights of the things he said:
— ECONOMIC GROWTH
The ECB left its key interest rate unchanged despite economic weakness in the 17-country eurozone. Draghi said a return to economic growth was still months away.
"The economic weakness in the euro area is expected to extend into 2013 ... Later in 2013 economic activity should gradually recover."
— TURNING POINT?
Draghi acknowledged that financial markets had improved significantly in recent months - government borrowing rates are down, stock markets are up and deposits are returning to banks in financially shaky countries like Spain. However, he said that was not enough to produce a turnaround in the economy.
"To define a turning point you need a lot of things beside financial market stabilization."
Draghi said government reforms were necessary to make Eurozone economies more competitive and return to growth. In the short term, however, governments' efforts to lower debt through raising taxes and cutting spending will keep hurting the economy.
Draghi insisted there was no way around the budget cuts or the reforms.
"Further structural reforms should be rapidly implemented to make the euro area a more flexible, dynamic and competitive economy. In particular, product market reforms to increase competition and competitiveness are essential, accompanied by measures to improve the functioning of labor markets."
The ECB aims to keep the inflation rate in the eurozone close to but below 2 percent. The rate has remained stubbornly above that for months and only recently began falling — it was 2.2 percent in December.
"Inflation rates have declined over recent months, as anticipated, and are expected to fall below 2 percent this year."