European Central Bank President Mario Draghi arrives for an EU Summit in Brussels on Thursday, June 28, 2012. European leaders gathering Thursday in Brussels are set to sign off on a series of measures to boost economic growth but expectations of a breakthrough on the pooling of debt have fallen by the wayside. (AP Photo/Michel Euler)
SummaryDAVID McHUGH
FRANKFURT, Germany (AP) – The European Central Bank is expected to cut interest rates on Thursday to help the continent’s fading economy and ailing banks.
Many economists think the ECB will cut its benchmark refinancing rate by a quarter point to 0.75 percent, a record low. However, the ECB is likely to hold off from more aggressive measures, such as new cheap loans to banks.
That’s because its president, Mario Draghi, has said there is only so much the central bank can do and that it is up to Europe’s politicians to restore confidence in the 17-country eurozone.
European leaders agreed at a summit in Brussels last week to create a banking regulator under the ECB’s aegis with the power to rescue banks directly. The goal is to spare single governments from being overwhelmed by the costs of rescuing banks and to make it easier for them to access Europe-wide bailout funds.