FRANKFURT - IT IS time for historic European Central Bank rate cuts to be passed on by banks to the eurozone economy, ECB president Jean-Claude Trichet says, suggesting the central bank might mark a pause.

The ECB has cut its main lending rate by 1.75 percentage points in two months, for the first time in its 10-year history, and now 'we have to get it in the real economy,' Mr Trichet said late on Monday during a dinner with media here.

ECB rate cuts began as part of a coordinated action with other central banks on Oct 8, and were followed by two more in early November and December, to leave the bank's benchmark at its present level of 2.50 per cent.

Other ECB directors have also suggested the bank might now be planning to wait before further lowering the cost of borrowing in the eurozone next year.

Mr Trichet refused to be drawn out on the subject however.

'I have absolutely nothing to say,' he replied to a question on the subject.

Many economists expect the benchmark lending level to fall to between 1.5 and 2.0 per cent by the end of March.

And Mr Trichet acknowledged the ECB governing council had considered cutting the rate dramatically to get commercial banks to start lending to each other again.

But, he added, 'We have in mind not to be too low,' and the bank has never taken its main rate below 2.0 per cent in the past.

Mr Trichet called again on commercial banks to do their part by using relaxed monetary conditions and other measures taken by the ECB to jumpstart lending.

'They have to be taken into account by financial institutions as part of their new environnement,' Mr Trichet said. 'We have to be pragmatic.'

ECB rate cuts are designed to allow banks to obtain refinancing at lower cost which would then normally be passed on to businesses and households.

But the system has ground to a halt because banks have essentially stopped lending to each other since the US market for high-risk, or subprime, mortgages collapsed in mid 2007 and the banks no longer were sure of being repaid.

Small and medium-sized businesses report that credit conditions have tightened, but Mr Trichet repeated that at present, data available to the ECB 'are signalling that there's no credit crunch' in the economic zone of 320 million people. -- AFP