FRANKFURT, Germany—European Central Bank head Mario Draghi says a weak eurozone economy has held back businesses from applying for loans despite the abundant cash made available by the central bank’s massive amounts of cheap credit to lenders.
Draghi made his remarks Wednesday after the bank left its key interest rate unchanged at 1 per cent.
The ECB handed out C1 trillion ($1.3 trillion) in cheap, three-year loans Dec. 21 and Feb. 29. Draghi said the measures would “need time to unfold and to have a positive effect on growth when demand recovers.”
The eurozone economy shrank 0.3 per cent in the fourth quarter and is struggling as governments cut budgets to reduce debt.