ECB’s Panetta: Consensus on Rate Cut Increasing in Recent Weeks
25 March 2024
By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Fabio Panetta on Monday said the recent inflation developments were increasing the consensus behind an interest rate cut within the Governing Council.
Speaking in Rome at an event celebrating 150 years since Italian politician Luigi Einaudi‘s birth, Panetta, who heads the Banca d’Italia, said, ‘As I noted in a speech last February, inflation in the euro area is falling rapidly and continues to approach the 2% target, making it possible for a rate cut. It is in this direction that a consensus is emerging - especially in recent weeks - in the Governing Council.’
The goal of the ECB was to restore price stability ‘without unnecessary damage to the real economy’, he said.
For Italy to gradually reduce its high public debt, it was necessary to plan short and long-term expenditure measures, he said.
‘The more credible the reduction path is, the less compensation investors will require to hold our debt’, he said. ‘This in turn will increase in turn the room for manoeuvre for fiscal interventions of a social nature and for dealing with future unforeseen situations.’