Draghi: calls for withdrawal of ECB support premature

FRANKFURT (Reuters) – European Central Bank President Mario Draghi dismissed a German-led push for the bank to start planning a retreat from emergency crisis-fighting, but stressed it was keeping a close eye on price pressures.

After holding interest rates at a record low of 1.0 percent of Wednesday, Draghi said “downside risks to the economic outlook prevail” and the ECB would need time to see the full impact of bumper funding operations it has used to help banks.

The ECB has pumped over 1 trillion euros into the financial system with the twin 3-year funding operations, or LTROs, to head off a credit crunch that late last year risked exacerbating the euro zone crisis and jeopardizing the currency project.

Draghi dismissed the push to begin preparing an exit from the ECB’s crisis mode – a drive led by Bundesbank President Jens Weidmann, with whom Draghi has stressed in recent months he has an excellent relationship.

“Given the present conditions of output and unemployment, which is at historical high, any exit strategy talking for the time being is premature,” he said, adding bluntly: “I think the president of the ECB is the one who has the last word on this.”