The eurozone economy will recover later this year and there are already some signs of stabilisation, according to the European Central Bank.
On that basis ECB President Mario Draghi and his policymakers unanimously decided not to cut the cost of borrowing at their first meeting of the new year.
The ECB’s main interest rate remains at a record low of 0.75 percent, where it has been since July.
At the news conference following the policy meeting, Draghi again urged governments to reform saying: “We are now back in a normal situation, from a financial view point, but are not – at all – seeing an early and strong recovery. The risks stem from essentially from a lack of action by the governments on the fiscal side.. and excessive creation of debt.”
Inflation remains above the Bank’s target and has been over two percent for more than two years, which also makes an interest rate cut difficult to justify.
The euro climbed to a one-week high against the US dollar after the decision.
Following the policy meeting the ECB unveiled the new design for the five euro banknote.
The first change since the currency hit the streets just over a decade ago, this note, and the higher denominations to follow, feature the mythical figure Europa in the watermark and hologram.
Ironically, given recent problems there, the Goddess Europa comes from Greece.