Later this year, driven by the euro zone economy, the European Central Bank's loose monetary policy and foreign demand recovery on track, the bank's president Mario Draghi said.
The ECB cut interest rates in May to a new record low, and said it would take action again if necessary, but the hand may be shelved this month and future inflation rebounded from 1.2% in May rose to 1.4% in April.
This is still well below the bank's target of about 2 percent, the unemployment rate in the euro area in April reached a new high of 12.2%, fueling further calls on policymakers to do more to help the economy.
"The economic situation in the euro area remains challenging, but there are some signs of possible stabilization, our baseline scenario is still a very slow recovery in the second half of this year," Draghi said in the text at the Shanghai International Finance Conference to prepare a speech .
Last year, the European Central Bank's policy meeting, a month ago, the bank said that economic activities should be gradually stabilized and restored. Bank to meet the rate again next Thursday.
Ahead of a court hearing in Germany later this month, the ECB's government bond purchase program, known as the Japanese currency transactions Outright (OMT) complaints, Draghi's speech spent a lot of defense initiative.
He said the threat of the ECB buying bonds play a key role in stabilizing the financial markets, "Almost all economic entities, including corporate, banking and family benefit.
"Nevertheless, the vulnerability still exists," Draghi said.
Calm the market has given the government more breathing space to adjust and last week, the European Commission announced that some countries will have more time to meet the deficit target.
But Draghi called on the government to adhere to its own path of reform.
"In order to inspire confidence, policy-makers must pass with their financial reform agenda," Draghi said.
"In fact, very few will get to relax from today's fiscal adjustment, if it creates additional tightening, the market is expected to be needed tomorrow."
He said that, in the medium term, it must ensure that the adjustment on the basis of improved productivity.
"Only through this firm to pursue structural reforms to competitiveness in the global market, the euro zone economy to recover," Draghi said.
The ECB started buying government bonds only once the country has signed the next bailout rigorous reforms and Draghi said that even so, OMT was "designed to keep government bond yields slightly lower than 'panic' levels . "
"Do not bring them down in some way help the government solvency levels," he said. "The ECB's intervention will not solve OMTS sovereign bond yield spreads of these fundamental reasons."
Draghi said it was important to remember always, especially in the current situation, the need to reform the government and parliament did not do so much the bond market, but dramatic in the labor market conditions.
 
 



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