By David Barwick – FRANKFURT (EconoStream) – The European Central Bank’s exit from its non-standard monetary policy measures is likely to be subject to a very long deferral, Governing Council member Robert Holzmann said on Saturday.

In an interview with Austrian daily Salzburger Nachrichten, Holzmann, who is Governor of the Austrian National Bank, said that while in the short term consumer prices could decline, more future inflation could not be ruled out.

Nothing is excluded from the ECB’s discussions of its policy, he said.

Asked whether, in the wake of the pandemic, the exit from non-standard policy would be deferred for a very long time, Holzmann answered, “Probably.”

Although the ECB will not run out of ways and means of controlling inflation, it must “continually adjust the toolkit to be able to react effectively to every situation,” he said.

Whether it is the tools or the inflation objective that must be adjusted is “part of the discussion about monetary policy strategy,” he said. “Everything is on the table, no stone is left unturned,” though price stability retains primacy over all else.

Holzmann predicted very low inflation and potentially lower prices in the short run on account of energy price declines. While describing as “not very high” the likelihood of more future inflation, he said the scenario could not be excluded.

It remains to be seen whether the overhang of capital and savings that has kept interest rates low in the past, in company with monetary policy, is drawn down, he said, leaving open the question of whether the future would bring higher interest rates or not.

Holzmann assured that, depending on the situation, the ECB’s policy measures could be adjusted or even supplemented by new programmes.