ECB’s Vasle: Remain Prepared to Take More Action if Needed

22 January 2021

By David Barwick – FRANKFURT (Econostream) – The European Central Bank Governing Council is ready to take additional measures if the situation warrants it, Council member Boštjan Vasle said Friday.

In a statement issued in his name by the Bank of Slovenia, which he heads, Vasle said that clearly recessionary developments in Europe’s service sector were still in line with the ECB’s latest staff macroeconomic forecasts.

Noting that the Governing Council had decided yesterday to stand pat for now, Vasle added that ‘we remain prepared to take further action if this proves necessary.’

‘With the aggravated epidemiological picture, the situation in the euro area services sector became markedly recessionary again at the end of the year and at the turn of the year’, he said. ‘This is in line with the ECB's December forecasts, in which no significant improvement is expected at the beginning of this year.’

Thanks to monetary policy support, conditions in financial markets are favourable, ‘which continues to enable the maintenance of favourable lending conditions for all sectors’, he said, noting the optimism regarding progress towards a medical resolution of the pandemic via vaccinations.

‘Nevertheless, some risks remain, including uncertainty about the future development of the health situation’, he added.

In Slovenia, he observed, government debt with a 10-year maturity had a negative yield in January for the first time, reflecting accommodative monetary policy.