The ECB president Mario Draghi is highly unlikely to cut the interest rate or announce a big bazooka for SME lending at tomorrow’s monthly meeting, according to senior economist with Brussels-based ING, Carsten Brzeski.

The ECB will wait until its June meeting to cut interest rates, although a move to boost SME lending could be announced at its May meeting, according to Brussels-based chief economist with ING Bank Carsten Brzeski.

The eurogroup of finance ministers would have to decide whether the ESM is used to recapitalise the Irish banks, but the ECB backs any proposal that breaks the link between banks and sovereign debt, said its president Mario Draghi.

The consensus view is that the ECB will keep the main interest rate on hold today, but its president Mario Draghi may signal the he is looking at unconventional ways of boosting lending to the wider economy.

Concerns are growing that the debt crisis across the eurozone is weighing on the German economy following the release of the country’s leading confidence indicator, which shows a downward trend for the fifth month.

An ECB source has said the Frankfurt-based institution would like to see senior bondholders included in the restructuring of banks as part of the EU bailout of the Spanish banking system.

A Spanish bailout is looking likely, writes Susana Vera, despite the government and the EU dismissing talks of a rescue package

A EUROPEAN Central Bank interest rate increase may “put a lid” on consumer spending in Ireland and Portugal and other peripheral euro area countries, said Carsten Brzeski, an economist at ING Group.