The European Central Bank is due to implement its new stimulus drive on Monday.
At an ECB meeting in Nicosia, a capital that has seen its fair share of financial turbulence, bank president Mario Draghi predicted improvements in the economic well-being of the eurozone as a result of ECB policy: “The substantial, additional easing of our monetary policy stands, supports and reinforces the emergence of more favourable developments of the euro area economy, financial market conditions and the cost of external finance for the private economy have eased further. Borrowing conditions for firms and households have improved considerably,” he said.
Inflation looks to remain low or maybe negative as a result of the drop in oil prices until later in the year, still the bank believes rates will rise to 1.5 percent in 2016 and up to 1.8 percent the following year.
The Greek situation is also under the microscope in Cyprus as Athens seeks new terms with the European Central Bank and other international lenders: “The ECB, up to today, has lent to Greece 100 billion euros, more exactly has doubled its lending from 50 to 100 in the last month and a half. So in this sense one can really say that the ECB is the central bank of Greece. But it is also the central bank of all the other countries.”
Draghi added that the ECB is willing to further assist the Greeks provided the necessary conditions are in place.
In other words the Greek government still has to convince its creditors that it is serious about making the required economic changes.