Explaining the decision, ECB president Mario Draghi said that economic activity in the Euro area was “expected to remain weak”.

“Inflation is likely to remain above 2% for the remainder of 2012,” said Mr Draghi at the ECB news conference, citing high energy prices and increases in taxes in some Euro area countries. But he said price rises were “expected to fall below that level in the course of next year”.

“The underlying pace of monetary expansion continues to be subdued.”

In September, the ECB announced a bond-buying program to try to ease the financial woes of a number of member states.

Under the initiative, called outright monetary transactions or OMT, the ECB will buy a country's government bonds after the administration in question has made a formal request for assistance.

The scheme has already been viewed as an effective insurance policy.This has eased the pressure on the bond yields of Spain and other indebted nations.

“As we said before, we are ready to undertake OMT, which will help to avoid extreme scenarios,” said Mr Draghi.

“Financial market confidence has visibly improved on the back of our decisions as regards outright monetary transactions,” he said.

In response to questions, Mr Draghi said the ECB stood ready to help Euro zone governments, but it was up to individual governments to make a request for help.

“On a Spanish request I will decline any comment. It's entirely in the hands of governments”. So far, no Euro zone nation has asked for help.

On Wednesday, Greek MPs narrowly backed a fresh round of austerity measures, despite violent protests across the country.

The austerity package aimed at securing the next round of bailout funds for Greece was passed with the support of 153 MPs in the 300-member parliament.

Welcoming the move, Mr Draghi said ”It's a very important step that the Greek government and the Greek citizens have undertaken. It really represents progress from what it was a few months ago.

MercoPress