ECB’s de Guindos: We Are in ‘Correct’ Position, But Must Keep ‘All Options Open’

30 June 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Vice President Luis de Guindos said on Monday that the current interest rate level was the right stance for the ECB, but that the institution had to remain flexible.

In a speech at a conference organised by Instituto Atlántico de Gobierno in Madrid, de Guindos said that interest rates, now at 2%, were in the ‘correct’ position and ‘compatible with an increasingly clear convergence to our price stability definition in the medium-term.’

However, the ECB had to keep all its options open with respect to interest rates given the high uncertainty, he said.

‘[I]n principle, and setting aside any exogenous surprise factors that could occur given the geopolitical situation, we believe we can be optimistic about achieving the definition of price stability, which is 2%’, he said.

De Guindos, who hoped Europe could achieve a trade agreement with the US once negotiations are over in the coming days, said that the US-China deal would also be important for Europe.

‘The agreement reached between the US and China could affect us significantly. Trade may be redirected’, he said. ‘If the US imposes high tariffs on China, it’s logical that China will look for other markets.’

The ECB projections did not account for the supply chain disruption risk, which would affect economic growth and inflation negatively, because its horizon went beyond the scope of the projections, he said.

‘But it is a factor to consider’, he added.

Eurozone economic activity had been very ‘reduced’, according to de Guindos, who said that growth would be flat in Q2 and Q3 and would compensate the 0.6% GDP increase in Q1.