Numerous ECB policymakers have flagged an interest rate cut for June, a first step in bringing down the record high rate of 4% it currently pays on bank deposits.
"The ECB's restrictive monetary policy is dampening demand and contributing, along with the decline in energy prices, to a rapid fall in inflation," Bank of Italy governor Panetta said in a speech in Rome.
"The risks to price stability have diminished and the conditions are materialising to launch (a process of) monetary easing," he added.
Panetta issued the same message at a speech on Monday, when he said that a consensus for a rate cut was emerging on the ECB's governing council, thanks to falling inflation.
(Reporting By Gavin Jones)
