ECB, Cipollone against Lagarde: “She brings us a new economic crisis”
“There is a real danger that the ECB’s approach could be too restrictive. We need to ensure that inflation converges towards our objective. without slowing down the economy unnecessarily, because we desperately need investment and growth in Europe”, said ECB board member Piero Cipollone in an interview with Le Monde reported on the Central Bank’s website. He stressed: “Any delay in this area puts us at a significant disadvantage.”
On rates, “decisions will be made on a case-by-case basis,” but “the data so far confirms our direction and I hope it will allow us to adopt a less restrictive approach.” In June, Cipollone explained in the interview published on the ECB website“our forecast for euro area GDP growth isin 2024 they were 0.9%. Second quarter data are consistent with these forecasts, but more recent information, such as consumer confidence and activity indicators (PMI), especially in manufacturing, were not as encouraging.”
“This – adds Cipollone – constitutes a risk for the growth prospects of the Eurozone. Investments remain low, which suggests that businesses do not believe in a strong recovery. This also weakens our future growth potential by reducing our economy’s ability to develop and adopt new technologies to increase productivity. Our inflation forecasts indicate that we will return to our 2% target in the second half of 2025. Until then, inflation data will be subject to fluctuations, but overall we are on the right track.”
Cipollone stressed that “these projections are based on market expectations for rate cuts. We are not making any advance commitments to any specific path. Decisions will be made on a case-by-case basis.”
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