World Economy

ECB Rift Widens

ECB Rift WidensECB Rift Widens

Two European Central Bank Governing Council members said they see no need as yet to ease monetary policy further in December, despite continued signals from the ECB’s leadership that such a decision remains an option.

“Knowing what I know as of today, including those inflation outcomes” for the eurozone in October, “which I think were more positive than I would have expected, I would see even less reason to make changes now,” Estonia’s Ardo Hansson told Bloomberg on Friday. His Slovenian counterpart, Bostjan Jazbec, said in Brdo, Slovenia, that he doesn’t “see the need for further additional unconventional measures by the ECB at the moment.”

Hansson’s comments reaffirm caution he voiced over the past two weeks over ramping up ECB asset purchases or cutting the deposit rate. Both are options highlighted by ECB President Mario Draghi on Oct. 22 as being matters for consideration at the next governing council meeting on Dec. 3. The Frankfurt-based ECB is attempting to boost an inflation rate that’s far below its target of just under 2%, at a time when falling commodity prices and slowing global trade are depressing price gains.

Despite his concern, Hansson said in an interview in Tallinn that the ECB has more room to cut the deposit rate than anticipated a year or two ago.

Klaas Knot, governor of the Dutch central bank, said on Friday that it’s important to weigh further action to fight inflation against the side effects of those policies. Latvia’s governing council member, Ilmars Rimsevics, also said on Oct. 28 that there’s a need to see more data before deciding on the need for a fresh round of stimulus.