Banca March| After years in which the monetary authority has been in charge of acquiring the debt of member countries and fiscal rules were frozen, the flexibility granted to fiscal policies must now be limited in order to contribute to lowering inflation and debt ratios. This has been repeatedly conveyed by the President and the Vice-President. However, she pointed out that the reduction of public deficits should be carried out in a prudent manner in the context of weak growth in the monetary union.
In terms of monetary policy and inflation, the message does not differ from what has been communicated so far: inflation is expected to continue to moderate, but more data are needed to show that we are close to 2% before we start to cut the cost of money. In this respect, Luis de Guindos pointed out that, if this is the case, “then the ECB Governing Council will change the level of interest rates”. The next meeting of the monetary authority’s officials and the presentation of economic forecasts will take place on 7 March.
