News / Europe

Europe Keeps Interest Rate Steady

European Central Bank President Mario Draghi speaks during monthly news conference, Frankfurt, Dec. 8, 2011 (file photo).
European Central Bank President Mario Draghi speaks during monthly news conference, Frankfurt, Dec. 8, 2011 (file photo).
VOA News
The European Central Bank is keeping its key interest rate unchanged, even as its leader says there is "increased downside risk" for economic growth in the euro currency bloc.

The bank kept its key lending rate at a record low 1 percent Wednesday, despite some calls from European bankers and financial analysts for cutting it to spur the continent's stagnant economy. The 17-nation eurozone is struggling to resolve its governmental debt crisis, as concern mounts over Spain's financially troubled banks and whether Greece becomes the first country to exit the currency union.

Britain says Prime Minister David Cameron and U.S. President Barack Obama agreed in a telephone call late Tuesday that the eurozone nations need an "immediate plan" to resolve the crisis, now in its third year, to restore investors' confidence, and then secure a stronger euro.

European Central Bank president Mario Draghi said economic growth "remains weak" in the eurozone and there is "heightened uncertainty" that weighs on the confidence of businesses and consumers.

"In the governing council's assessment, the economic outlook for the euro area is subject to increased downside risk, relating in particular to a further increase in tensions in several euro area financial markets, and their potential spillover to the euro area real economy," he said.

But Draghi predicted there would be a gradual improvement in the coming months. The bank left its economic growth projection unchanged, saying that the eurozone economy could advance by up to one-half of one percent this year.

In the meantime, Spain's banking crisis remains unresolved.

Spanish Finance Minister Luis de Guindos said the government would decide within the next two weeks how to finance the $100 billion recapitalization of Spanish banks faced with mounting losses on toxic real estate loans. Spain could seek some form of a rescue package from its European neighbors, who already have sent billions of dollars in bailouts to Greece, Portugal and Ireland during the past two years.

Greek voters are headed to a second round of parliamentary elections June 17, after a splintered vote last month left the country's fractious political parties unable to form a new coalition government.

European leaders have called on the Athens government to keep its earlier pledge to impose new austerity measures in exchange for its second bailout in two years. But there is widespread opposition to the spending cuts within Greece and the election has effectively become a referendum on whether it stays in the eurozone.

Some information for this report was provided by AP and Reuters.

You May Like

US, China Have Dueling Definitions of Cybersecurity

Analysts say attribution or or proving that a particular individual or government is responsible for a hack, is a daunting task More

Snowden: I'd Go to Prison to Return to US

Former NSA contractor says he has not received a formal plea-deal offer from US officials, who consider him to be a traitor More

Goodbye Pocahontas: Photos Reveal Today's Real Native Americans

Weary of stereotypes, photographer Matika Wilbur is determined to reshape the public's perception of her people More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Making a Minti
October 07, 2015 4:17 AM
While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video Self-Driving Cars Getting Closer

We are at the dawn of the robotic car age and should start getting used to seeing self-driving cars, at least on highways. Car and truck manufacturers are now running a tight race to see who will be the first to hit the street, while some taxicab companies are already planning to upgrade their fleets. VOA’s George Putic has more.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Clinton Seeks to Boost Image Before Upcoming Debate

The five announced Democratic party presidential contenders meet in their first debate next Tuesday in Las Vegas, Nevada. Former secretary of state Hillary Clinton continues to lead the Democratic field, but she is getting a stronger-than-expected challenge from Vermont Senator Bernie Sanders. VOA National correspondent Jim Malone has more from Washington.

Video Music Brings Generations Together

When musicians over the age of 50 headline a rock concert, you expect to see baby boomer fans in the audience. Boomer rock stars have boomer fans. Millennial rock stars have millennial fans. But this isn’t always the case. Take the Lockn’ Music festival which took place in mid-September in rural Arrington, Virginia. Here, Jacquelyn de Phillips discovered two generations of people who are considered quite different in the outside world, spending 4 days together in music-loving harmony.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video South Carolina Reels Under Worst-ever Flooding

South Carolina is reeling from the worst flooding in recorded history that forced residents from their homes and left thousands without drinking water and electricity. Parts of the state, including the capital, Columbia, received about 60 centimeters of rain in just a couple of days. Authorities warn that the end of rain does not mean the end of danger, as it will take days for the water to recede. Zlatica Hoke reports.

Video Russia’s Syria Involvement Raising Concerns in Europe

European nations are joining the United States in demanding that Russia stop targeting opposition groups other than the Islamic State militants as Russian warplanes continue to conduct raids in Syria. The demand came in a statement from Britain, France, Germany, Qatar, Saudi Arabia, Turkey and the United States Friday. VOA Europe correspondent Luis Ramirez reports.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs