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).
TEXT SIZE - +
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

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends More

Turkish Law Gives Spy Agency Controversial Powers

Parliament approves legislation to bolster powers of intelligence service, which government claims is necessary to modernize and deal with new threats Turkey faces More

Video Face of American Farmer Changing

Average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Face of American Farmer is Changingi
X
Mike Osborne
April 18, 2014
The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid