The European Central Bank Council (ECB) missed the opportunity on Thursday to address the main issue of the future: the development of monetary developments in the euro area from October and ending the ultra- expansive monetary policy and the end of government bond purchases. These issues have not been discussed at the regular meeting, according to President Mario Draghi. Following a decision so far, the ECB intends to acquire mainly government bonds for up to EUR 30 billion a month up to and including September, leaving interest rates to zero until far beyond this period. The central bank will then issue securities totaling more than 2.5 trillion.
Draghi motivated the lack of discussion with the fact that a detailed analysis of economic development was very important before. In the euro area, economic power has fallen slightly in recent weeks, but remains above the average. The Board of Governors must now, according to the President's statements, give an idea of whether the decline is only temporary or permanent, whether it is driven by supply or demand and whether it is a normalization of growth or a significant decline in growth
However, the ECB stressed in its communication that despite the economic downturn, expects the solid and widespread decline in the euro area. The risks to economic prospects are also largely balanced, "said Draghi, although increased protectionism is a risk factor. Inflation is still too low at the moment of "monetary guardians", and inflation therefore needs generous support from the central bank. Aid from the ECB through the purchase of securities, reinvestment of funds from maturing bonds and forward-looking prospects. Draghi continues to believe that euro area inflation is in line with the ECB's target of below but close to 2% in the medium term.
On Thursday, Vítor Constâncio held his last meeting of the ECB Board. The Vice President, who often followed Draghi's words in media conferences with appropriate grimace, leaves the Council after eight years on a regular basis. Portuguese remained largely pale during its service and was a strong supporter of ultrasonic monetary policy. On June 1, Luis de Guindos, former Minister of Economy and Finance in Spain, will take over the post of Vice President of the ECB. To what extent the direct transition from a political office to the ECB's deputy faith contributes to the credibility of the central bank is an open question.