MercoPress. South Atlantic News Agency

Euro zone interest rates at record-low 1% for eleventh month

President Jean Claude Trichet said he expects “no Greek surprise” based on current data

The European Central Bank (ECB) has kept the Euro zone interest rate at its record-low level of 1% for the 11th month in a row. The decision was expected and comes as the ECB is scaling back its lending to banks aimed at stimulating the economy.

Speaking at the monthly press conference, President Jean-Claude Trichet said the ECB expected growth to be moderate for the rest of the year. But he warned of a continued “environment of uncertainty”.

Mr Trichet said the bank's interest rates were “appropriate” given moderate inflation and economic growth in the early months of the year.

Asked repeatedly for his views on the outlook for crisis-hit Greece, he insisted that the ECB supported the package of measures agreed by European Union leaders in March.

“The statement of the heads of state and government is, in the opinion of the ECB, a workable framework,” Mr Trichet said.

But he stressed that what was important was that the austerity programme announced by the Greek government was implemented. “I have no reason to think it will not be”, he told reporters, but added: “We remain alert.”

Asked whether he thought Greece might default on its debt he said: “Taking all the information I have, a default is not an issue for Greece.”

Concern has been growing in the markets about Greece's situation and the level of support it will need, pushing its borrowing costs to record levels.