Date: Thursday 17 May 2012
International Monetary Fund (IMF) spokesperson David Hawley suggested that the European Central Bank (ECB) has room for monetary easing considering that inflation is expected to fall below two per cent.
"The ECB has room for further monetary easing, given the expected weakening of underlying pressures," said spokesman David Hawley, hinting that unconventional policy measures, such as the long-term refinancing operations in December and February, may be needed.
The IMF also announced that it will travel to Greece following the June 17th elections in order to revise its loans programme.
Spain also asks for ECB to step in
Earlier today, Spanish Economy Secretary Fernando Jimenez Latorre said that the ECB should react to the pressure seen in debt markets, especially in Spain. Latorre stated that Spain is taking the necessary measures, which justifies a certain level of backing from the monetary authority in order to reign in speculation. He suggested that investors should be made aware of added risks in taking short positions.
GESTHA, a Spanish labour union of tax inspectors, warned that they are considering filing a claim against the ECB in Brussels for not introducing measures that reduce the country's risk premium. They affirmed that the lack of commitment by the ECB has contributed to increasing the financing costs for Spanish citizens and businesses, which hurts the recovery and competitiveness of the Spanish economy.
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