Other measures

The ECB also announced on Thursday the extension of unlimited cash loans to commercial banks for up to 12 months from the current maximum of six, with the exact interest rate to be decided on June 23.

But the commercial banks will not apply for long-term loans before they are assured that the key interest rate has reached the lowest point.

The current policy showed that no matter whether the ECB further lowers the interest rate or not in June, the rate to be announced then would probably be at the lowest level.

Several policymakers have said they do not hope the rate will drop below 1 percent for practical and psychological reasons.

As the last major measure, the ECB announced on Thursday that the European investment Bank (EIB) will become an eligible counterpart in the Euro system's monetary policy operation since July.

The EIB is mainly responsible for providing loans for small and medium-sized enterprises (SMEs), the financing of which was hit hard by the current international financial crisis.

Analysts believed that the coordination between the EIB and the ECB can effectively help the SMEs face the crisis.

Signs of hope

Trichet said the latest data and survey information suggested some positive signs of stabilization "albeit at low levels."

For example, the business climate index of the euro zone rebounded in April, its first improvement since may 2008.

But "overall, economic activity is going to be weak for the remainder of the year before gradually recovering in the course of 2010," said Trichet.

(Xinhua News Agency May 8, 2009)