ECB’s Vasle: Seeing Broad-Based Economic Recovery in Euro Area

23 July, 2021

By David Barwick – FRANKFURT (Econostream) – The economy of the euro area is improving on a broad basis, European Central Bank Governing Council member Boštjan Vasle said Friday.

In a statement issued in his name by the Bank of Slovenia, which he heads, Vasle said, ‘The economic picture in the euro area improved sharply in the second quarter of this year. The health situation, the vaccine rollout and the easing of containment measures have given rise to a broad-based recovery.’

Developments are consistent with the ECB’s last macroeconomic forecasts, and the risks ‘remain evenly balanced’, he said.

Vasle noted that the broadly-based nature of the recovery was leading to a better situation on the labour market. Manufacturing was continuing to show strong growth, joined now by a ‘sharp improvement’ in services, he said, citing the 14-year high reached by the latest services PMI for the region.

‘The outlook for the coming months remains good, while the risks over the projection period remain evenly distributed’, he said. ‘Faster growth could lead to increased spending of the savings accumulated during the crisis. This could also be helped by a faster improvement in the health picture.’

The delta variant was the biggest current downside risk, he said.

Reiterating the ECB’s new forward guidance, Vasle said accommodative monetary policy ‘will thus continue to ensure ample liquidity and favourable financing conditions for the banking sector, the non-banking sector and euro area governments, thereby supporting the ongoing economic recovery after the epidemic and ensuring stable price growth over the medium term.’