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Draghi points to persisting risks in justifying massive stimulus

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The euro-area economy still needs significant monetary-policy support to counter external risks that are weighing down growth and inflation, according to European Central Bank President Mario Draghi.

[FRANKFURT] The euro-area economy still needs significant monetary-policy support to counter external risks that are weighing down growth and inflation, according to European Central Bank President Mario Draghi.

"Substantial monetary policy stimulus remains essential to ensure the continued build-up of domestic price pressures over the medium term," Mr Draghi said in the foreword of the institution's annual report. Vice President Luis de Guindos will present the document to European lawmakers in Brussels on Monday.

In the largely backward-looking account of 2018, the ECB discussed economic activity, policy priorities and the state of the region's banking sector. It doesn't mention topics such as a new long-term lending program or measures to mitigate the impact of negative interest rates on banks that have occupied policy makers more recently.

Instead, Mr Draghi reiterated that "in view of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, the conduct of monetary policy in the euro area will continue to require patience, prudence and persistence."

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The report includes remuneration details, which show the president's basic salary increased 1.1 percent to US$451,000. That's below last year's average euro-area inflation rate of 1.8 per cent.

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