June 7 (Bloomberg) -- European Central Bank Executive Board member Benoit Coeure said the ECB policies announced this week demonstrate that euro area interest rates will remain low in the coming years even as they begin to rise elsewhere.
“What’s clear is that for a very long period, several years, monetary conditions will be divergent in the euro zone on one hand and in the U.S. and the U.K. on the other,” Coeure said today on France Inter radio. “We’ll keep rates close to zero for an extremely long period. The U.S. and the U.K. will enter into a cycle of rate rises. That’s a decisive factor for market actors.”
ECB President Mario Draghi said two days ago that the Frankfurt-based central bank will offer banks as much as 400 billion euros ($545 billion) of liquidity for up to four years at current ultra-low rates. The program comes against a backdrop of low inflation and mediocre economic growth for the euro area.
“It will take time because the European recovery is slow and the adjustment of all countries, including France, takes time. What we’re trying to do is accelerate,” Coeure said. “The objective is to provide every possible chance to a recovery in investment and consumer spending.”
The first offer of such loans to banks, dubbed the TLTRO, will be made in September.
“Now, in a general way, it’s the responsibility of banks to put in place programs that, based on these ECB facilities, will reach companies,” Coeure said.
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