FRANKFURT AM MAIN: The European Central
Bank should soon be in a position to reduce its extraordinary monetary support
to the eurozone economy, board member Sabine Lautenschlaeger has said.
"I am optimistic that we can soon
turn to the question of an exit," the German economist said in a speech in
Hamburg late Tuesday.
With rising consumer confidence and
unemployment at a seven-year low, "the situation seems to be improving in
the euro area," she noted.
"A broad-based recovery is under
way," Lautenschlaeger went on. "At the same time, inflation in the
euro area rose signficantly" in December.
The ECB introduced unprecedented
ultra-loose monetary policy in the wake of the financial crisis, hoping to
drive economic growth and encourage inflation towards its objective of just
below 2.0 percent.
Interest rates are at historic lows,
while the bank buys tens of billions of euros of government and corporate bonds
each month and offers banks cheap loans in a bid to pump cash into the economy
via the financial system.
Calls for an end to the ECB's
extraordinary measures have grown after monthly data showed that inflation
nearly doubled to reach 1.1 percent across the eurozone in December -- and 1.7
percent in its largest economy, Germany.
ECB president Mario Draghi countered at
a press conference last week that the December rise in inflation was mostly
driven by volatile energy prices, and that underlying inflation remains weak.
Draghi said the time would come when
the bank would start scaling back its stimulus measures, "but we are not
there".
Nevertheless, Lautenschlaeger said,
"all preconditions for a stable rise in inflation exist."
"We need to be ready to act when the
time comes," she went on. "It's important to stop taking the medicine
as soon as possible, but not too early either. Otherwise, we risk having a
relapse."
Copyright AFP (Agence France-Press),
2017
No comments:
Post a Comment