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Business Recorder
a day ago
- Business
- Business Recorder
ECB will keep doing all is needed to meet inflation goal, Nagel says
MILAN: The European Central Bank (ECB) will keep doing all that is necessary to complete its nearly accomplished mission on inflation, one of its top policymakers, Bundesbank President Joachim Nagel, said on Thursday. Annual euro zone inflation fell to 1.9% in May, from 2.2% in April, EU statistics office Eurostat said on Wednesday. Speaking at the Young Factor student conference in Milan to promote financial literacy, ECB Governing Council member Nagel said that bringing euro zone inflation to the 2% target was the best thing the central bank could do to promote economic growth. 'I guess this year we are coming close to our target, 2% on average, that is more or less mission accomplished,' the German central banker said, adding that the ECB has been shown to be good at using a wide range of tools to achieve price stability. 'We are now in the neutral territory of monetary policy,' he said. 'So I believe that we are on the right track when it comes to monetary policy. … We will do what is necessary, we did it in the past.' ECB has learned its lesson about ills of easy money, de Guindos says ECB Vice President Luis de Guindos, at the same conference, said the ECB would stick to a data-dependent, meeting-by-meeting approach to monetary policy given the high level of uncertainty linked to geopolitical developments. In Milan on Wednesday, ECB policymaker and Bank of Italy Governor Fabio Panetta said the ECB would retain a flexible approach, pointing to forecasts indicating that euro zone inflation would undershoot the ECB's 2% target for an extended period of time. Bank of Portugal Governor Mario Centeno said on Wednesday at the student conference that weak economic growth in the euro zone could prevent inflation from hitting the ECB's target. However, Nagel stressed that the ECB's mandate was solely price stability, so it did what it could within that remit, laying the ground for politicians to do the rest.
Straits Times
2 days ago
- Business
- Straits Times
ECB's Panetta says EU a victim of US efforts to distance Russia from China
FILE PHOTO: Bank of Italy Governor Fabio Panetta attends the G7 Finance Ministers and Central Bank Governors' Meeting in Stresa, Italy May 24, 2024. REUTERS/Massimo Pinca/File Photo ECB's Panetta says EU a victim of US efforts to distance Russia from China MILAN - The United States' "confrontational" trade stance towards Europe is a consequence of US efforts to give Russia a seat in international forums and weaken its ties with China, a top European Central Bank policymaker said on Wednesday. ECB Governing Council member Fabio Panetta told a student conference in Milan he believed the European Union was paying the price for taking a firm stance against Russia in light of the war in Ukraine. In attempts to limit China's international influence, the administration of U.S. President Donald Trump is ready to sacrifice its historic ties with Europe, he said. Western sanctions against Russia have strengthened Moscow's ties with China in recent years. On Wednesday, Russia's deputy economy minister urged Brazil to complement China in filling the gaps in Russian markets left by the exodus of Western companies. Panetta told the Young Factor conference in Milan that the United States saw Russia's alliance with China as too big of a threat. "It would be extremely difficult to compete with China's industrial, technological, and financial power if that is combined with Russia's natural resources," Panetta said. "So I believe President Trump's goal is to give Russia back its international legitimacy, so to speak ... If that's the plan, then the economic area that most opposed Russia's invasion of Ukraine, i.e., the European Union, is your worst enemy," he said. Trump told the Group of Seven summit in Canada on Monday that the G8 had been wrong to kick out Russia in 2014 after it annexed Crimea from Ukraine. Trump also said that while trade talks with the EU continued, he did not feel the EU was offering "a fair deal" yet and may have to "just pay whatever we say they have to pay." European Commission President Ursula von der Leyen told reporters at the summit that the objective was still to reach a deal before higher tariffs kick in on July 9 after a 90-day pause. Panetta said the difference between the average duty the EU applied to U.S. goods and the average U.S. duty on goods from the economic bloc was small, and the issue would have been easily solvable. "But if the EU is the obstacle as Washington seeks to distance Russia and China, that can explain the aggressive attitude towards a commercial partner," he said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Reuters
2 days ago
- Business
- Reuters
ECB's Panetta says no reason to fear banks' liquidity drain from digital euro
MILAN, June 18 (Reuters) - The digital euro will be designed in a way that poses no threat to the overall liquidity held by the banking system, top European Central Bank policymaker Fabio Panetta said, adding that the ECB could anyway counter any hit to liquidity. Speaking to students at the annual Young Factor conference in Milan, Panetta said a digital euro was a necessity because the digitalisation of the economy risked marginalising the role of central bank money, leading to a riskier and more unstable economic environment. Under the digital euro project, euro zone residents would be able to transfer part of the money in their bank accounts into digital euro accounts with the ECB. To avoid depriving commercial banks of an excessive amount of deposits, the project envisages capping individual savers' digital euro holdings. Panetta said such limits would be set in a "conservative" way, calculating what would be the impact on the aggregate level of liquidity of the maximum amount of cash each saver could shift into digital euros to make sure there is no impact on the economy. "Anyway, be aware that even if the digital euro drained liquidity away from banks and turned bank deposits into central bank liabilities, the level of liquidity in the system is a decision of the European Central Bank. The ECB can offset any reduction in liquidity," Panetta said. "It's like real liquidity. Like water in a tank. Whatever amount spills out, we can refill it. The digital euro is being built in a way that ... limits outflows from bank deposits. On top of that, the ECB could always offset any impact."
