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ECB chief Mario Draghi pushes 'growth agenda'

The European Central Bank (ECB) head, Mario Draghi, has said that governments must push growth - but not at the expense of bringing down deficits.

"We have to put growth back at the centre of the agenda," said Mr Draghi.

The comments came after the ECB left its benchmark interest rate unchanged at 1%.

But it has pumped more than 1tn euros ($1.3tn; £800bn) of loans into the European economy since January to boost the availability of credit.

Since its last meeting in April, Spain and Italy have also re-entered recession, raising concerns over the rationale of spending cuts.

A debate over whether governments should prioritise austerity or measures to boost growth is raging around Europe, amplified by the fact that Greece and France are going to the polls on Sunday.

Meanwhile, figures released on Wednesday showed that unemployment across the 17 countries that use the euro reached a record high of 10.9% in March, the highest rate since the euro was formed in 1999, Eurostat said.

Mr Draghi has pushed the idea of a "growth compact" - which has not been clearly defined - to go along with the "fiscal compact" that the eurozone nations signed up to bring their deficits and spending in line.

"There is absolutely no contradiction between a growth compact and a fiscal compact," Mr Draghi said at the press conference following the rate decision.
'Full confidence'

In the eurozone as a whole, 17.4 million are now looking for work and more than three million of those are under 25.

Spain has the highest number of unemployed people, but the ECB's president, Mario Draghi, said the "track record of the country is good".

"We have full confidence that immediate actions on the fiscal and banking front will be taken," he said

He added that the ECB was not exploring withdrawing its emergency measures - such as its cheap loans programme.

"Nobody would deny that liquidity is abundant in the euro area, but having said that any exit strategy remains premature."

He has previously insisted that its various measures to flood financial markets with cheap cash have been an "unquestioned success".

BBC News

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