ECB cuts rates in surprise move to calm markets

The European Central Bank cut its key interest rates in a surprise move on Thursday to calm markets amid mounting risks that Greece might have to leave the eurozone. European stock markets, severely depressed by the Greek-eurozone debt crisis, rallied strongly on the news. The ECB's policy-setting governing council voted to lower the rate for its main refinancing operations by a quarter of a percentage point to 1.25 percent at the regular monthly meeting here, the first to be chaired by the bank's new president, Mario Draghi of Italy. The 64-year-old Italian was scheduled to explain the reasoning behind the decision at his first-ever news conference later. But the move came as surprise as ECB watchers had not expected Draghi to announce any cut in interest rates just yet, only two days after taking over from Jean-Claude Trichet of France. All eyes will be on the new chief at the news conference as many people see the ECB as the only body capable of action to calm the markets, amid the havoc that was sparked earlier this week when Greek Prime Minister George Papandreou announced plans to put an EU rescue deal to a referendum. The move angered Greece's European partners and Berlin and Paris issued Athens with an ultimatum on the eve of Thursday's G20 summit in Cannes that it would not get "one more cent" from the European Union and International Monetary Fund unless it accepts the bailout deal.