FRANKFURT, Sept 4 - The following is a selection of comments from the European Central Bank's news conference on Thursday after the bank's council decision to hold its benchmark refi rate at 2.0 percent. Double-click on [nL04617091] for the interest rate story, on [nECBVIEW] for analysts' comments and on [nECBTEXT] for opening remarks at the press conference. All comments from ECB vice president Lucas Papademos unless otherwise noted. THIS ITEM WILL BE UPDATED THROUGHOUT THE NEWS CONFERENCE LATEST COMMENTS
PUBLIC FINANCES "Sound public finances and sustainable public finances are conducive not only to price stability but also to long-term growth.... "The extent to which an expansionary fiscal policy can have positive effects on growth depends a lot on the overall fiscal position of the country as well as on the extent to which it can strengthen consumer and investor confidence." COORDINATION "We take into account all information related not only to economic, financial and monetary developments but also fiscal policies that are being pursued, but there is no scope for any ex-ante coordination, if I may call it, of policies. We take interest decisions so as to achieve our objectives."
EARLIER COMMENTS INFLATION "I can confirm that expected inflation in both the remainder of this year as well as in 2004 and 2005 is not fundamentally affected by changes that have taken place in the exchange rate or in oil prices. "Inflation is expected to be below two percent and in line with our objective of price stability."
EARLIER COMMENTS STRUCTURAL REFORM "Progress in implementing structural reforms is as important as fiscal prudence and efforts to bring public pension systems onto a sustainable path and further develop private pension schemes deserve support." ECONOMY "Recent financial developments are in line with our main scenario of a gradual upturn of economic activity. "In line with available forecasts and projections we continue to expect this upturn to start in the second half of the year and then to strengthen further in the course of 2004."
RECOVERY "As regards external factors, recent data signals that the recovery is already underway in certain parts of the world which will lead to an increase in euro area export demand... On the domestic side ongoing adjustment efforts by companies to enhance competitiveness and profitability should improve the conditions for an economic upswing. In this environment the low level of interest rates is strengthening incentives to invest. Furthermore real disposal income in the euro area should be positively affected by... effects stemming from the past apprecIation of the euro."
INTEREST RATES "We concluded that the current level of ECB rates remains appropriate as the medium term outlook for price stability continues to be favourable. The historically low interest rates are lending support to economic activity."//