MercoPress. South Atlantic News Agency

The 1.1 trillion Euro bond buying program is 'effective' says ECB' president Dragui

Mr Draghi said that the deflation threat to the Euro zone had not gone away: “inflation is expected to remain very low or still negative in the months ahead.”

A protester crashed a press briefing as the European Central Bank (ECB) explained the success of its 1.1 trillion euro bond buying plan. ECB President Mario Draghi said: “There is clear evidence that the monetary policy measures we have put in place are effective.”

 However, his news briefing was interrupted by a female protester screaming: “End ECB dictatorship.'' She rushed onto the stage and threw what looked like confetti. Finally she was dragged off the stage by security officials

The news conference was delayed for a few minutes and then resumed with Mr Draghi re-reading his opening statement.

Mr Draghi said that the deflation threat to the Euro zone had not gone away. He said: ”Inflation is expected to remain very low or still negative in the months ahead.“

Mr Draghi was speaking after the bank announced it would keep its key interest rate at an all time low of 0.05%. The ECB has held rates at this level across the 19 countries that use the euro currency since September 2014.

Since February, it has turned to its monthly €60bn bond-buying program, or quantitative easing, to stimulate the economy. Some activists accuse the ECB of enforcing budget austerity measures on Euro zone countries, such as Greece, that are under financial bailout programs.

Asked about the extent to which additional emergency liquidity assistance will be provided to Greek banks, Mr Draghi said it ”is entirely in the hands of the Greek government“.

Draghi said that the buying of bonds had successfully fed through into the real economy.

He said: ”Financial market conditions and the cost of external finance for the private sector have eased considerably over the past months and borrowing conditions for firms and households have improved notably, with a pick-up in the demand for credit.

“The Euro area economy has gained further momentum since the end of 2014. Looking ahead, we expect the economic recovery to broaden and strengthen gradually.”

Dragui said the bond-buying program, the weak Euro and the expectation of higher interest rates would lead to rising inflation in late 2015, as well as during 2016 and 2017. He added the program would continue “until the end of September 2016 and, in any case, until we see a sustained adjustment in the path of inflation”.

Inflation in the Euro zone is at minus 0.1%, way below the ECB's aim of 2%.