European Central Bank President Jean-Claude Trichet today signaled that the
central bank will not hike the benchmark rate in June, despite the rise in
commodity-induced inflationary pressures. He said ECB support for Ireland was
Eurozone inflation rose to an annual 2.8% in April, according to the latest EU estimate.
The Eurozone economy is expected to grow 1.7% this year and 1.8% in 2012, according to ECB forecasts. Inflation will average 2.3% in 2011 and 1.7% in 2012, the staff forecast March. Updated projections are due in June.
At his press conference, Trichet said the level of commitment of the
Eurosystem to Ireland, has no precedent.
IMF mission head Poul Thomsen said today that Portugal's economy will face "significant headwinds in the next three years" and is expected to contract by 2% in 2011 and 2012 before returning to growth in the first half of 2013.
Trichet said about Portugal: "We are confident. Of course it calls for the present government ... and future governments to do the job."
On Greece, Trichet ruled out any idea of Greece's restructuring its debts. Asked Greece might have to get more lenient terms from its debt holders, Trichet said: "We consider it's not in the cards."
The PIIGS Have Returned:
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