They Said It - Recent Comments of ECB Governing Council Members

18 September 2023

By David Barwick – FRANKFURT (Econostream) – The following is an overview of recent comments made by European Central Bank Governing Council members. We include only comments made since the Governing Council meeting of 14 September, but earlier comments can still be seen in versions up to that of 11 September.



de Cos (Banco de España)


de Guindos (ECB)


Centeno (Banco de Portugal)


Herodotou (Central Bank of Cyprus)


Holzmann (Austrian National Bank)


Kazāks (Latvijas Banka)


Kažimír (National Bank of Slovakia)


Knot (Dutch National Bank)


Lagarde (ECB)


Lane (ECB)


Makhlouf (Central Bank of Ireland)


Müller (Eesti Pank)


Nagel (Bundesbank)


Panetta (ECB)


Reinesch (Central Bank of Luxembourg)


Schnabel (ECB)


Scicluna (Central Bank of Malta)


Šimkus (Bank of Lithuania)


Stournaras (Bank of Greece)


Välimäki (Bank of Finland)


Vasle (Banka Slovenije)


Villeroy (Banque de France)


Visco (Banca d’Italia)


Vujčić (Croatian National Bank)


Wunsch (National Bank of Belgium)


Christine Lagarde (ECB)
15 September 2023

‘I repeat, we have not decided, discussed or even pronounced cuts.’

14 September 2023

‘What we have decided is actually reflected in that key paragraph, which I have read twice because it is in the body of the text which was released to you earlier and also in the conclusion of the text. And it has caveats: “based on our current assessment”. So, it is based on all the data, the numbers, the analysis, the assessment, the projections and any other information that we have available. We considered that “the key ECB interest rates have reached levels” – note, levels – “that, maintained for a sufficiently long duration” – so there is the time element that comes up – “will make a substantial contribution” – substantial contribution, those are heavy words – “to the timely return of inflation to the target”. And we don't stop here. The whole paragraph is important and needs to be read in symbiosis. So the next sentence says that “our future decisions will ensure that the key ECB interest rates will be set at – one – “sufficiently restrictive levels” – two – “as long as necessary”. Those are really two parameters that are going to guide us very much. Not that we are forgetting about the three components that have guided our reasoning so far. We will continue to follow a data-dependent approach to determining the appropriate level and duration of restrictions. In particular, our interest rate decisions will be based on our assessment – and I repeat there, it's in the in the text – of number 1, inflation outlook in the light of the incoming economic and financial data, number 2, the dynamics of underlying inflation, number 3, the strength of monetary policy transmission. So, that addresses your question and I think that the exercises that no doubt some of you will conduct in relation to “substantial contribution” and how that substantial contribution contributes from “significant level maintained for as long as necessary, based on current assessment”, gives you the answer to your question.’

‘…GDP has been revised significantly. We moved from 0.9% to 0.7% in 2023 and more importantly we moved from 1.5% to 1.0% in 2024. But let me just take a moment to explain to you what seems like the biggest revision, which is 2024. Most of it, actually three quarters of that revision of 0.5, is attributable to carry over from 2023. So we are going through a period of about five quarters of very, very sluggish growth and, based on our projection, we are coming to the end of it. The pickup according to the same calendar, the same quarter calendar that we have had in the June projections, picks up again in 2024. The downgrade from 1.5% to 1%, as I said, is a carry-over from 2023. In 2025, we have a small revision and we move from 1.6% to 1.5%, which is really a minimal revision. In essence, the recovery we had projected for the second half of 2023 is actually pushed out into time for various reasons that I'm happy to expand upon. That is what we are seeing.’

‘We are not saying either that we are now at peak. I think the sentence that I read is really the critical one. With today's decision, we have made sufficient contributions, under current assessment, to returning inflation to target in a timely manner. And as I said, both elements matter, the level sufficiently restrictive and the duration. But it's obvious that the focus is probably going to move a bit more to the duration. But we can't say that now we are at that peak. I know it is complicated, because the “as long as necessary” cannot be actually pinned down and the “substantial contribution” cannot be pinned down either, because we have to conduct an assessment every time against the data, against the analysis, against the various information that we derive from experts, and against the projections and what our staff offers.’


Isabel Schnabel (ECB)


Philip Lane (ECB)


Luis de Guindos (ECB)
18 September 2023

‘Underlying inflation’s worst moment has passed and it should moderate.’

15 September 2023

‘With this hike, and with the hikes that we have carried out in recent months, we are ultimately reaching a level that over time, we believe will be a very important contribution for inflation to return in the coming quarters to a level consistent with price stability, which is 2%. … But we believe that with the current level, if it is maintained for a while, there is a high possibility that in before too long, inflation will converge to 2%.’

‘It is very soon [to expect rate cuts this year]. I think inflation is going to continue to decline, both headline and core inflation. The markets are betting; the markets can be wrong. They are based on a series of hypotheses that sometimes do not come true, that we will start to lower rates in June '24. Well, it is a bet; it may be right, it may not be right.’


Fabio Panetta (ECB)


Joachim Nagel (Bundesbank)


François Villeroy de Galhau (Banque de France)
15 September 2023

‘…there is indeed some encouraging news: headline inflation has passed its peak since the beginning of 2023, and it seems that core inflation is following suit. Indeed, the latter started to recede, to stand at 5.3% in August (down from 5.5% in July and 5.7% in March) in the euro area. Obviously, these inflation rates remain too high: we must and we will bring inflation back towards our 2% target by 2025. I reiterate this morning this clear commitment which is fully consistent with our latest ECB forecasts. Monetary policy is the first line of defence, and the main remedy for this disease. I won’t make comments about yesterday’s Governing Council and monetary decision. But our collective fight against inflation calls for a more appropriate policy mix: the revision of the European economic governance framework provides a major window of opportunity to realign fiscal and monetary policy. Alongside high inflation, public debts have reached historical levels mainly due to unprecedented waves of shocks, but also, for several countries, to legacy debts. Now that these shocks are fading, governments must avoid an overly expansionary stance that would further fuel inflationary pressures. We therefore need a more coordinated and realigned fiscal and monetary stance.’


Ignazio Visco (Banca d’Italia)


Pablo Hernández de Cos (Banco de España)


Klaas Knot (De Nederlandsche Bank)


Pierre Wunsch (Belgian National Bank)


Mārtiņš Kazāks (Latvijas Banka)
17 September 2023

‘The market shouldn’t expect that we would jump too early to cut rates, We’ll start cutting rates when we see that we consistently and significantly start to undershoot our target, and what I can say clearly is that expectations of a rate cut in spring or early summer in my view are not really consistent with the macro scenario that we have.’

‘While I’m comfortable with where rates are at the moment, if necessary we will take the right decisions. To say we’re at the peak — I don’t think we can do that.’

15 September 2023

‘I'm comfortable with the current level of rates and I think we're on track to reach 2% in the second half of 2025. But if the data tells us that we need another hike, we'll do it.’

‘Markets have to take a position but [an April rate cut] is inconsistent with our macro scenario. We've clearly said we'll stay in restrictive territory for as long as necessary to get inflation to 2%.’

‘There is excess liquidity that has to be removed and we'll have to discuss it. It has to happen before rates are cut.’


Tuomas Välimäki (Bank of Finland)


Madis Müller (Eesti Pank)
16 September 2023

‘We should have a discussion soon about how to proceed with PEPP reinvestments and for how long. There’s a strong argument in favor of stopping PEPP reinvestments sooner than the end of next year. That would be consistent with our interest-rate policy.’

‘There’s a good chance that we don’t have to lift rates any higher, but of course that can change if inflation doesn’t come down as quickly as expected.’

‘Of course we don’t want to cause a recession, but that’s not what we have in the cards now. It’s a difficult period for the euro area economy but we should still expect a gradual recovery toward the end of the year.’

15 September 2023

‘At yesterday's European Central Bank Council meeting, we decided to raise interest rates by another 0.25%, but we also made it clear that, to the best of our knowledge, no further interest rate hikes are expected in the coming months. Interest rates have already reached high enough to be expected to bring inflation back to close to 2% in the euro area over the next two years, slowing credit growth and cooling the momentum of the eurozone economy. This, of course, does not rule out the possibility that if the rapid price increase recedes more persistently than expected, interest rates will still have to be increased in the future.’


Boštjan Vasle (Banka Slovenije)
15 September 2023

‘I wouldn’t exclude that further hikes might be necessary. What we’ll be doing in the future depends crucially on new information we’ll receive.’

‘At the December meeting, we’ll have an additional set of new information and also new forecasts. We’ll have three more readings of inflation, we’ll have more information on what’s going on with growth dynamics. I believe this will add to the significance of this meeting.’

‘Core inflation is still relatively high. Yesterday’s rate increase will importantly contribute to bringing inflation down.’

‘The recent increases and especially the current level of interest rates will open more space for deliberations on other segments of monetary policy, especially QT.’

15 September 2023

‘In the light of the latest forecasts and the fact that inflation remains high despite the slowdown, the members of the Governing Council have decided to raise key interest rates again by 25bp. Based on our current assessment, we believe that with this hike, the ECB's key interest rates have reached levels that, if maintained for a sufficiently long period, will make a significant contribution to returning inflation to the target level. I would like to underline that, as has been the case so far, the next steps will depend on the current situation, in particular economic and financial data, the evolution of underlying inflation and the strength of the impact of our actions. Accordingly, our future decisions will continue to ensure that interest rate levels remain sufficiently restrictive for as long as it takes for inflation to return to our 2% target in time.’


Yannis Stournaras (Bank of Greece)
17 September 2023

‘Monetary policy has done its part to fight inflation. Now it’s up to fiscal policy to take out some of the heat.’

‘A more restrictive fiscal stance wouldn’t only be a welcome strategic complement to ECB policy but also help improve the credibility of public debt and loosen the nexus with banks. There are synergies that should be reaped.’

‘I would have preferred to hold rates last week. But there were arguments in favor of both outcomes — hiking and holding — so I’m fine with the decision we took.’

15 September 2023

‘As monetary tightening has caused a general increase in interest rates and weaker growth, there is no room for complacency in fiscal policy. In this context it is imperative that the fiscal stance remains restrictive, and the new fiscal rules (which are more flexible and avoid the procyclicality of the previous ones) are in place in the Eurozone from the beginning of 2024. The increase in ECB interest rates and the curtailment of its balance sheet (through TLTRO repayments and APP pause of reinvestments) have up to now been beneficial for commercial bank profitability via an increase in their interest rate margins (because they reprice lending rates immediately but deposit rates with a substantial lag). However, this is not expected to continue due to the gradual increase in deposit interest rates, funding costs from money markets and the reduction of loan demand. Hence, commercial banks should be prepared for a more difficult banking and macroeconomic environment, due to monetary policy tightening. The non-bank financial sector (money market funds, hedge funds, private equity funds, asset management companies, insurance companies, pension funds, etc.) has in general behaved rather well despite the multiplicity of shocks in recent years. However higher interest rates, low growth, demanding market valuations provide reasons for concern, the more so due to the various kinds of exposures of banks to non-banks.’


Peter Kažimír (National Bank of Slovakia)
18 September 2023

‘I wish last week’s interest rate hike was the last one. Nevertheless, common sense dictates, “Never say never.” We now must wait for the next inflation and economic growth forecasts due in December and March next year. Only the March forecast can confirm that we are heading unequivocally and steadily towards our inflation goal. That is why I cannot rule out the possibility of further rate increases today. Should the September hike be the last one, we have the answer as to how high it will be necessary to go with rates. This is clearly good news for all the people and all those who plan to borrow money from a bank. It remains open and unanswered how long it will be necessary to stay with rates at peak levels. The most sincere answer would be: “As long as we are not sure that inflation is undoubtedly heading towards the target despite the ever-present risks.” It is, therefore, premature to place market bets on when the first interest rate cuts will occur. I understand that this is precisely what the markets are analyzing and betting on today. Assume we’re (already) at the top. If so, we may have to stay camping here for quite some time and spend the winter, spring and summer here. We will see. At the same time, the end of interest rate hikes opens a debate on whether, and if so, how to adjust our plans with the PEPP and APP purchase programmes. On this one, I would wait to touch the control buttons for the coming six months. As soon as incoming economic data and analyses confirm that further tightening is unnecessary, I see room for a debate about adjusting the pace of our quantitative tightening. In other words, how quickly will we reduce our bond portfolio accumulated in recent years. Short and sweet, the next stop is December!’


Mário Centeno (Banco de Portugal)
18 September 2023

‘We believe that, if we keep them at this level, we will do something decisive so that inflation can converge to 2%, which is our target. The most important thing at this point was to provide some predictability so that we can adapt to what is expected in the coming months. The risk of doing too much is always present in monetary policy, it happened in 2008 and 2011 when the ECB had to backtrack because raising rates was not compatible with price, financial and economic stability. That risk is real and we have to be vigilant.’

‘The decision has been made, we are all involved in it, beyond personal opinions. We now have the challenge of ensuring that the predictability we added to the Council's message comes to fruition. We must lower inflation and guarantee that the economic mechanisms are up to the task. We cannot deviate from this path because inflation is more regressive and socially unfair than the measures we use to combat it, which are often harsh and damage the economy. The problem is that inflation does it too. We in the Governing Council try to manage this difficult balance.’


Gabriel Makhlouf (Central Bank of Ireland)


Gediminas Šimkus (Bank of Lithuania)
15 September 2023

‘I want to hope this is the last dose of medicine - the raise of 25bp.’


Robert Holzmann (Austrian National Bank)
16 September 2023

‘We definitely can’t say that this was the final hike. The likelihood isn’t big, but there is a risk more tightening might be needed.’

‘Looking at some of the reactions to our decision, one could think we agreed on a dovish hike. I don’t agree with such an interpretation, especially given that inflation risks haven’t receded of late.’


Boris Vujčić (Croatian National Bank)
15 September 2023

‘Existing risks for further prospects of inflation, either positive or negative, still require a vigilant monitoring of trends and data so that the measures of monetary policy can continue to respond to the challenges in a timely manner.’


Gaston Reinesch (Central Bank of Luxembourg)


Constantinos Herodotou (Central Bank of Cyprus)


Edward Scicluna (Central Bank of Malta)