The European Central Bank Shadow Council said it saw no need to set an interest rate floor at 1 percent, smashing official ECB proposals to prevent the rate from reaching 0 percent.
The council, which was founded in 2002, is an independent panel of European economists who make their own recommendations, based on the ECB's long-term economic objectives as defined in the EU Treaty.
In a meeting held Thursday night, its 15 members favored by a majority lowering the ECB's refinancing rate below 1 percent.
Their recommendation comes before a meeting by the ECB's governing council next Thursday to decide on monetary policy. ECB President Jean-Claude Trichet has said unconventional policy measures may be announced after the May meeting.
Of the 15 members, one argued in favor of a cut by 100 basis points to 0.25 percent, five were in favor of a cut by 75 basis points and seven in favor of a cut by 50 basis points. The remaining two members advocated a cut of 25 basis points to 1 percent.
"If the ECB were to drive down rates to rock-bottom levels, then, since we are seeing improvement in the money markets, it may not be necessary for the ECB to undertake quantitative easing", Julian Callow, chief European economist at Barclays Capital, said.