In his press conference, the bank's president Jean-Claude Trichet said the recovery continued in the early months of 2010 — figures earlier this week showed eurozone output was flat in the last three months of 2009 — but that the bounceback would be “uneven” and come at a “moderate pace.” Regarding inflation, Trichet said price stability was likely over the medium term despite a recent uptick largely due to weather factors, and that inflationary expectations were “firmly anchored.” Aside from the economy, the main point of interest will be on what Trichet says about Greek borrowing — earlier the spread between Greek and German 10-year bond yields widened to 4.4 percentage points earlier, its highest level since the euro was introduced in 1999. The higher the spread, the less confidence markets are showing in Greece's ability to pay.
Particularly worrying is that the spread between the Greek and German 2-year bonds swelled by a staggering 1.2 percentage points Thursday as investors demanded more interest just to hold Greek debt.
