Trichet also sees green shoots: delayed recovery to 2011

The ECB kept rates at 1% and revised downward its growth forecasts for 2009 and 2010. In cocnreto estimates that GDP in the euro area could get up to 5.1% this year and 1% next.

In the traditional press conference following the meeting of the ECB Governing Council, which considered "appropriate" to keep interest rates steady at the historical low of 1%, the head of monetary policy in the eurozone announced some details of the purchase of mortgage bonds announced on May 7.

The French banker stressed that the total volume of purchases provided by the institution is 60,000 million euros and did not want to go assess potential increases in the amount or type of assets that could be acquired.

In particular, the ECB will conduct direct purchases of bonds denominated in euros in the primary market and in the secondary and said it may call those entities entitled to participate in the normal credit operations of the Eurosystem.

Furthermore, the ECB president sought to play down criticism by the German Chancellor Angela Merkel, who warned that the measures taken and to buy assets by the Fed and the Bank of England, which now joins the ECB serve to fuel future crises. In this regard, Trichet said that had a telephone conversation with German Chancellor Merkel in which he expressed his full support and full respect for the independence of the ECB.

Worse forecasts

Furthermore, Trichet announced that the institution economists foresee a contraction in the eurozone economy of between 4.1% and 5.1% in 2009, while for 2010 it is expected that the activity is at a range between -1% and 0.4%.

The French banker said that the downward revision of forecasts of the ECB, especially in reference to 2009 reflects the results "very weak" in the first quarter, which will "significantly" to the growth rates of the whole year.

"The latest data show that after two quarters of negative growth, economic activity for the remainder of the year will shrink at a rate much lower," said Trichet, who predicted that "after a stabilization phase, expected quarterly growth rates positive in mid-2010.

Regarding inflation, the ECB's economists predict that inflation will be harmonized in 2009 between 0.1% and 0.5%, slightly below forecasts in March, while for 2010 it is expected that range between 0.6% and 1.4%, in line with previous forecasts.