Brussels – June will be the moment of truth: that is when we will find out whether the European Central Bank will raise interest rates. ECB Vice-President Luis de Guindos has made it clear that monetary policy action to address the rise in inflation caused by the war in Iran may be taken at the next meeting of the Executive Board (10 June).
“The current economic situation is characterised by significant uncertainty due to the war in the Middle East, and energy markets remain volatile,” said de Guindos during a hearing before the European Parliament’s Committee on Economic Affairs. “I don’t know how the situation will develop,” and to get a clearer picture “, we will have to wait a while,” but only a month. “We will have to wait until June,” when “we will have more information and new projections.”
Before taking any decisions, the ECB waits until it is certain that the situation warrants them. That certainty does not yet exist, and “for this reason I believe that the Governing Council’s decision to keep interest rates unchanged was the right one,” he asserts, referring to last week’s decision. “In this new context, a prudent and clear-headed approach will be far more necessary than in the past,” he explains, making clear what the European Central Bank’s modus operandi is and will be.
“We must stay calm,” he tells members of the Economic Affairs Committee. De Guindos’s words are an exhortation to do the same, a call for responsibility. Not least because, he points out, the euro area economy “experienced a moderate and broad-based recovery in 2025, despite a difficult global environment,” albeit one marked by uncertainty. Last year, “growth rose to 1.4 per cent for the year, highlighting the resilience of the euro area economy.” So, no need to panic.
English version by the Translation Service of Withub
