ECB’s Escrivá: Secular Weak Growth Could ‘Complicate’ Role of Monetary Policy

31 October 2024

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member José Luis Escrivá said on Thursday that persistently sluggish economic growth would undermine the job of monetary policy.

In a speech at the Santander International Banking Conference in Madrid, Escrivá, who heads the Banco de España, said that ‘secular weak growth and productivity, as the one that we are seeing at present, could complicate the conduct of monetary policy going forward.'

For Escrivá, implementing the suggestions of the Letta and Draghi reports would be subject to time and political constraints faced by governments.

‘For a few months we have been discussing the Letta and Draghi reports. These solutions are clearly desirable and need to be promoted, but some would require time and some political consensus before they can be implemented’, he said.

European countries should also focus on strengthening growth on a national level apart in addition to following the recommendations of both these reports, according to Escrivá.

‘They [the Letta and Draghi reports] should not inhibit us from focusing on that there is substantial homework at the national level’, he said.