NEWS
04/07/2016 12:19 EDT | Updated 04/08/2017 01:12 EDT

Draghi: ECB will do 'whatever is needed' to raise inflation

LISBON, Portugal — European Central Bank head Mario Draghi says the top monetary authority for the countries that use the euro will do "whatever is needed" to push up inflation from its dangerously low levels.

Draghi's remark Thursday underlines the bank's willingness to step up its stimulus efforts even though they were increased as recently as its last meeting on March 10.

And his speech indicated a readiness to push back against criticism from some media and politicians in Germany, the eurozone's biggest member, who say the ECB has done too much.

Draghi said in a speech prepared for delivery in Lisbon that the current stimulus was "without precedent" and was supporting a moderate economic recovery. He said it was time for national governments to start taking steps to make their economies grow faster, producing more demand for goods and services and raising inflation and employment.

He said that "the ECB has and will continue to do whatever is needed to comply with its mandate."

"We have solid evidence that the monetary policy measures that we have taken since mid-2014 are being effective in delivering their intended impact," he said. He cited ECB statistics showing that borrowing costs have fallen steeply for both businesses and consumers.

The ECB on March 10 decided to increase its monthly bond purchase stimulus to 80 billion euros ($91 billion) a month from 60 billion euros. The purchases pump new money into the banking system in hopes that it will be lent to businesses or used to purchase other assets, increasing their prices and inspiring their owners to spend. The ECB also cut its benchmark for short-term bank borrowing to zero, and cut the rate it pays on banks' deposits at the central bank to minus 0.4 per cent from minus 0.3 per cent. That means the banks have to pay to park cash at the ECB, a spur for them to loan excess funds.

The office of Marcelo Rebelo de Sousa, Portugal's new head of state, said he invited Draghi to hear his views on Europe's economic and financial situation. The governor of the Bank of Portugal was also invited to Thursday's meeting. Guests do not commonly attend a Council of State.

Portugal's centre-left Socialist government, which took power at the end of last year, is scrapping some austerity measures adopted after the country's 78 billion euro ($88.6 billion) bailout in 2011. It says it wants to focus on pro-growth policies.

David McHugh And Barry Hatton, The Associated Press