ATHENS, Dec 28 (Reuters) - The risk of deflation in the euro zone is negligible and if price stability risks subside further monetary policy loosening would be warranted, European Central Bank Vice President Lucas Papademos said in a newspaper interview on Sunday.
"As regards the future, risks to price stability seem to be balanced but may show a downward trend. If this projection is confirmed, then further loosening of monetary policy is advisable," Papademos told Greek newspaper Kathimerini.
He said the ECB would "carefully evaluate" the economic situation and the prospects for price stability based on the latest data.
Papademos also told the paper he saw no visible risk of deflation in the euro zone, which he defined as a continuous fall in the price level for a long time. "There are many reasons why the risk of deflation is considered negligible. There is not a visible deflation risk on the horizon," he said. (Reporting by George Georgiopoulos; Editing by Jason Neely)