According to Bank of Greece Governor Yannis Stournaras, the European Central Bank’s monetary policy direction will not change due to the euro’s appreciation against the dollar. In an interview with Bloomberg Television (L. Burden), Stournaras stated that euro appreciation does not create problems for achieving the inflation target (by pushing down the consumer price index), explaining: “We have incorporated this euro appreciation into our baseline scenario. I think most of the euro appreciation took place during the first quarter of last year. So this is not some dramatic development that would push us to change course.”
He added that the “prices we have seen so far are within the range of fluctuation that has been observed in the past. Therefore, we do not consider a change of course appropriate. The inflation rate recorded in January was an isolated element: our medium-term forecast for inflation is 2%, so we see no reason to change direction (in monetary policy).”
Stournaras on euro appreciation
Referring to the international geopolitical situation, the Bank of Greece Governor emphasized that there is great uncertainty globally, both in geopolitical terms and regarding trade fragmentation.
“I think we have shown that we keep our options open, acting with flexibility and realism, while simultaneously achieving a soft landing of the economy. I believe therefore that the ECB’s credibility is very high at this moment. He added that the ECB acts with flexibility and realism while keeping all its options open,” he said.
When asked whether artificial intelligence will affect growth and inflation in the eurozone in the future, Stournaras argued that there are some positive elements, however it would be desirable to have better resource allocation in favor of innovation and artificial intelligence. In any case, investments have increased and, as a percentage of GDP, are very close to the US level at 22.5%. There has also been a reorientation of demand, with a shift from exports – necessarily, due to tariffs – toward domestic demand, investments, as well as increased consumption.
