ECB says further policy measures to come as rates left unchanged

The European Central Bank kept interest rates unchanged at record lows and said President Mario Draghi will announce further policy measures at a media briefing later.

The Governing Council left the main refinancing rate at 0.05 percent, a decision predicted by all 48 economists in a Bloomberg News survey. The deposit rate remained at minus 0.2 percent and the marginal lending rate at 0.3 percent.

At about 2:30 p.m. in Frankfurt, Draghi will probably commit to a quantitative-easing program that may exceed 1 trillion euros ($1.2 trillion). The ECB?s arrival at this point, three months after the Federal Reserve ended its own QE, marks a critical juncture in the history of the currency and the European unity it embodies.

?QE in Europe is like trying to push on a piece of string, there?s nothing to push against,? Anne Richards, chief investment officer at Aberdeen Asset Management Plc, said at the World Economic Forum in Davos. ?Until France and Italy, and to a lesser extent Germany, wake up to the fact that we?ve got to do something on the political front and got to really target structural reforms, we?ll be sitting here in 12 months? time wondering why QE failed.?

ECB rift

The euro fluctuated after the announcement and was up 0.2 percent at $1.1629 at 1:52 p.m. Frankfurt time. Spanish and Italian bonds pared their declines

The ECB?s Executive Board on Wednesday proposed spending 50 billion euros a month, primarily on sovereign debt, through the end of 2016, taking a total package to about 1.1 trillion euros, according to two euro-area central-bank officials.

QE has been long in the making. The ECB took a step in that direction in 2010 when it bought the bonds of debt-strapped countries such as Greece. That was opposed...