Nowotny Says Euro-Zone Growth to Strengthen in 2nd Half: Nikkei

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The European Central Bank Governing Council member, Ewald Nowotny, expects growth in the euro-zone to rebound in the second half of the year, Reuters reported, citing Nowotny in an interview with Japanese Nikkei economic newspaper.

The prospect of a return to growth would pave the way to deliberate normalizing crisis-mode stimulus policies, Nowotny said to Nikkei. He also addressed ECB President Mario Draghi’s recent comments and said markets were wrong to interpret them as signaling a prolonged ultra-loose monetary policy.

Draghi’s comments refer to statements the ECB president made in April on possible steps to mitigate the impact on commercial banks of its negative deposit rate. Nowotney says it was premature to debate how to respond on euro-zone growth as policy decisions would have to "depend on economic data at the time." Resuming quantitative easing is technically a possible option if growth did not rebound, Nowotney said to Nikkei.

The ECB is not discussing a deepening of negative rates, nor considering adopting a cap on long-term rates, he was quoted as saying by the Nikkei.

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