ECB's Praet Says Talk of Ending Loose Policy is 'Premature'
March 24 2017 - 05:19AM
Dow Jones News
By Todd Buell
FRANKFURT--Talk of the European Central Bank ending its very
accommodative policy is "premature", the central bank's chief
economist said in an interview published Friday.
While "the deflation risk is gone" and the growth picture has
improved, "the economic outlook is still conditional on maintaining
a substantial degree of monetary accommodation. Talks about exit
are premature," said Peter Praet in an interview with Italian
newspaper Il Sole 24 Ore, which was published in English on the
ECB's website.
Mr. Praet said "the Governing Council has not signaled a change
in the monetary policy stance, including its forward guidance," he
said. "Our forward guidance has served us well and led to financial
conditions that are appropriate. We reiterated it," he said. "We
had no discussion on sequencing in the Governing Council."
Recently there had been suggestions that the ECB would deviate
from its forward guidance, which says that it will keep interest
rates at current or lower levels until well past the end of its
bond purchase program.
He said he was worried about "the populist narrative that things
were better before the euro. This is a deception!"
In the case of Italy, he said that "the nostalgic alternative
that everything will be all right just by returning to the lira
amounts to fooling the people. The cost of a regime change would be
huge and the poor would be the ones that suffer the most."
-Write to Todd Buell at todd.buell@wsj.com
(END) Dow Jones Newswires
March 24, 2017 05:04 ET (09:04 GMT)
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