The European Central Bank cut interest rates to a record low andsaid it won't pay anything on overnight deposits as the sovereigndebt crisis threatens to drive the euro region into recession.

Policy makers meeting in Frankfurt today lowered the ECB's mainrefinancing rate to 0.75 percent from 1 percent, as predicted by 49of 64 economists in a Bloomberg News survey. The ECB also cut itsdeposit rate to zero from 0.25 percent and its marginal lendingrate to 1.5 percent from 1.75 percent.

With Europe's debt crisis curbing growth across the continentand damping the global outlook, the ECB was under pressure to easemonetary conditions, even though Draghi last month voicedmisgivings about the effectiveness of a rate reduction. Whiletoday's moves may not stimulate demand, they will lower borrowingcosts for struggling banks and could build on the confidence boosteuro-area governments delivered last week when they took stepstoward a deeper economic union.