ECB’s Panetta: Effective Policy Necessary to Avoid Shocks

26 January 2024

By Isabel Teles – RIGA (Econostream) – European Central Bank Governing Council member Fabio Panetta on Friday said that Europe could avoid shocks that could fragment the economy with an ‘effective policy response’.

In a speech at a conference organised by Latvijas Banka, Panetta, who heads the Banca d’Italia, said that ‘Europe can easily withstand large shocks, as long as it sticks together and responds quickly and decisively with appropriate policies.’

Macroeconomic stability, the Capital Markets Union (CMU) and a payment and market infrastructure that responded to the current demands were the three key ingredients that would make it possible, he said.

‘The common thread behind these initiatives is that they all reinforce the integration process; they would allow us to build on our past achievements and take the Economic and Monetary Union a step closer to a truly integrated monetary, fiscal and political union’, he said.

During a panel discussion following his speech, Panetta said that the introduction of the digital euro was challenging both in the technical dimension, and in the political one when it came to cross-board interoperability in the global context.

Privacy and cybersecurity were priorities in the development of the digital euro, he said. ‘The issue is crucial and we’re investing a lot.’