As expected, the
European Central Bank
Thursday left its interest rates unchanged.
Following the ECB's larger-than-expected 50-basis-point cut two weeks ago, the meeting of bank's 17-member Governing Council was bound to be a nonevent. ECB President
has said the cut a fortnight ago to 2.5% was all the markets could expect for the foreseeable future. Notably, the rate announcement is the first disclosed while the European markets were still open.
The bank's decision to stand pat comes on the heels of downward revisions by the
International Monetary Fund
and the ECB for European growth this year. Most forecasts only expect 2% growth for euroland, and Duisenberg has repeatedly said the central bankers have done all they can to stimulate the area's economy.
In its monthly report for April, released on Tuesday, the bank justified the recent half-point rate cut for the euro area by saying the region's economic recovery may take longer than officials had expected.
The ECB now believes it's up to the currency bloc's governments to undertake structural reforms while exercising fiscal restraint to get the Continent's economy fired up. Whether the politicians will take up the challenge remains to be seen, but it would appear that Europe's monetary authorities have for the time being taken themselves out of the mix.
The ECB sets monetary policy for Germany, France, Italy, Spain, Portugal, the Netherlands, Belgium, Finland, Luxembourg, Ireland and Austria.