6 Jun 2014
ECB's Constancio: Eurozone inflation and growth must improve to help tackle debt overhang
ECB Vice-President Vítor Constâncio, who delivered a speech today at the Institute of International Finance meeting in London, commented on the package of measures introduced by the central bank at the monetary policy meeting on Thursday.
The ECB policymaker stressed that the debt overhang in the Eurozone would be dealt with better when growth and inflation in the Eurozone reached a more reasonable level. He said that on Thursday the central bank reaffirmed and reinforced its forward guidance and added that more measures would be implemented should the need arise.
As far as the series of targeted longer-term refinancing operations announced by Draghi are concerned, Constancio explained that the total amount of liquidity to be provided would depend on the takeup.
"A vicious downward cycle in the Eurozone would require a large asset purchase program," Constancio said. The central bank must now observe the impact of the package of measures on the foreign exchange market, he added.
The ECB policymaker stressed that the debt overhang in the Eurozone would be dealt with better when growth and inflation in the Eurozone reached a more reasonable level. He said that on Thursday the central bank reaffirmed and reinforced its forward guidance and added that more measures would be implemented should the need arise.
As far as the series of targeted longer-term refinancing operations announced by Draghi are concerned, Constancio explained that the total amount of liquidity to be provided would depend on the takeup.
"A vicious downward cycle in the Eurozone would require a large asset purchase program," Constancio said. The central bank must now observe the impact of the package of measures on the foreign exchange market, he added.