European Central Bank president Mario Draghi undermined hopes of a rate cut Wednesday, saying the bank’s earlier forecast for a gradual recovery this year is accurate.
The view puts him at odds with outgoing World Bank President Robert Zoellick, who last week compared Europe to the period just prior to Lehman ’s collapse, and said a 2008-style panic is a possibility.
The ECB also left rates unchanged Wednesday, ratcheting up pressure on euro zone leaders to tackle a government debt crisis that threatens the global economy.
“The decision Wednesday by the bank’s 23-member governing council left the refinancing rate at a record low 1%,” according to a report from AP. “The bank is under pressure to stimulate a weakening economy of the 17 countries that use the euro with a rate cut. But [Draghi] said that growth ‘remains weak, with heightened uncertainty weighing on confidence and sentiment’ and cited ‘downside risks’ to growth.”