Eurozone growth faster than expected, says ECB's Draghi

(AGI) Rome, Mar 23 - The European economy will grow faster thanexpected and prices will start rising at the end of this year,European Central Bank (ECB) chief Mario Draghi told theEuropean Parliament. This was testament to monetary policydecisions made by the bank, and the member states shouldcontinue to implement reforms. Eurozone inflation would remainvery low or negative over the coming months, but wouldgradually start to rise towards the end of this year. Hebelieved prices would rise 0 percent on average in 2015,climbing to 1.5 percent in 2016 and 18 percent in

(AGI) Rome, Mar 23 - The European economy will grow faster thanexpected and prices will start rising at the end of this year,European Central Bank (ECB) chief Mario Draghi told theEuropean Parliament. This was testament to monetary policydecisions made by the bank, and the member states shouldcontinue to implement reforms. Eurozone inflation would remainvery low or negative over the coming months, but wouldgradually start to rise towards the end of this year. Hebelieved prices would rise 0 percent on average in 2015,climbing to 1.5 percent in 2016 and 18 percent in 2017.European growth was gaining momentum and the basis for economicrecovery in the eurozone was clearly stronger. The bank haddecided it had to revise December forecasts for this year up0.5 percent and for 2016 up 0.4 percent, he said in Brussels.This was due to the fall in oil prices, an increase in demandand easier finance "driven by our accommodative monetarypolicy, and the depreciation of the euro". Mr Draghi defendedthe bank's new Quantitative Easing measures and said that itspolicy to buy government bonds, which began on Mar. 9, wouldpump 60 billion euros a month into the economy until Septembernext year or until sustained price inflation kicked in. He saidthis was consistent with the bank's target to bring inflationdown to around 2 percent. Inflation in the eurozone area wouldremain low or negative over the next few months, but would risegradually towards the end of the year. Talks between Greece andthe institutions aimed to create the proper conditions forreinstating the bailout programme and he was confident thatthis would be achieved. Greece must honour its debt commitmentsin future policies, so that the programme could be revised. TheECB would be prepared to reinstate the waiver for Greekgovernment bonds, which cannot be used as collateral guaranteesbecause they do not conform to the desired criteria. The ECBexposure to Greece stands at 104 billion euros, more thandouble last December's 50 billion. This represented 60 percentof Greek GDP. Governor of the Bank of Italy Ignazio Visco saidon Monday that the government bond-buying programme hadimproved the macro-economic situation, reduced uncertainty andbolstered confidence. It was, however, a programme destined byits very nature to fade out once price stability had beenachieved, as set out in the ECB mandate. It was time to bringin structural economic growth interventions, with measures thatwould improve both productivity and employment, creating newincome and new demand. .