Despite inflation in the euro area estimated to have fallen to 1.7% in January (see EUROPE 13801/27), below the 2% stabilisation target set by the European Central Bank (ECB), the Governing Council of the Frankfurt-based institution decided unanimously on Thursday 5 February to leave its three key interest rates unchanged.
For the fifth time in a row, the deposit facility rate, the main refinancing operations and the marginal lending facility are therefore maintained at 2.00, 2.15 and 2.40% respectively.
“Our updated assessment reconfirms that inflation should stabilise at its 2% target in the medium term. The economy remains resilient in a challenging global environment”, said ECB President Christine Lagarde on Thursday afternoon, noting however that “the outlook for inflation continues to be more uncertain than usual on account of the volatile global policy environment”.
A ‘checklist’ for Alden Biesen’s informal retreat. On Thursday, the ECB President reiterated “the urgent need to strengthen the euro area and its economy in the present geopolitical context”, a message that the Governing Council has repeated on several occasions in its latest monetary policy decisions (see EUROPE 13776/16).
“What we decided to do in anticipation of this meeting (see EUROPE 13801/2) is to give our ‘checklist’ to the leaders”, said Mrs Lagarde.
“We are delivering monetary policy (...), but we strongly feel that significant reforms have to be either deepened or accelerated in order to deliver on Europe’s potential”, she said solemnly.
The President spoke of the Savings and Investment Union, the digital euro and the tokenisation of wholesale central bank money, the deepening of the EU’s single market, the promotion of innovation, the protection of strategic autonomy, the simplification of European legislation and the strengthening of the basic institutional framework.
See the Governing Council’s monetary policy decision: https://aeur.eu/f/kls (Original version in French by Bernard Denuit)