ECB deaf to call for more action to help euro zone

Sun Apr 22, 2012 2:15pm EDT
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By Mark Felsenthal

WASHINGTON (Reuters) - European Central Bank officials showed no sign of bending to renewed international pressure to do more to boost the euro zone's struggling economy.

Top ECB policymakers, attending the International Monetary Fund's spring meetings, politely but firmly rebuffed the IMF's call that the bank should cut its policy interest rate below 1 percent and be prepared to provide more public funding to banks to reduce the risk of a new flare-up of the crisis.

"It's a free world, we take note of this, but let me say that none of the advice of the IMF has been discussed by the Governing Council, in recent times at least," ECB President Mario Draghi told a news conference on Friday.

And the ECB delegation to Washington had nothing to say, at least publicly, about a fresh suggestion by U.S. Treasury Secretary Timothy Geithner that the ECB had a role to play in helping European economies through tough reforms ahead.

"We think we have done our task in the last months by quite a number of standard and non-standard measures we have taken," ECB executive board member Joerg Asmussen said on Friday on the sidelines of the IMF meetings.

He said the ball was now in the court of euro zone governments, which are trying to narrow budget deficits and undertake other reforms to restore market confidence and generate growth.

Unlike the U.S. Federal Reserve, which pursues full employment as well as low inflation, the ECB's marching orders are to focus on keeping price growth in check, a point underscored by ECB officials several times over the weekend.

The Fed may yet provide more stimulus, on top of its near-zero interest rates and the $2.3 trillion in bonds it has already bought, even though the U.S. economy is stronger than Europe's.   Continued...

European Central Bank President Mario Draghi takes his seat for an International Monetary and Financial Committee (IMFC) meeting during the spring IMF-World Bank meetings in Washington, April 21, 2012. REUTERS/Jonathan Ernst