ECB’s Stournaras: Soft Landing Achieved, but Must Remain Flexible and Ready to Act

17 September 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Wednesday said that the ECB had succeeded in achieving an equilibrium but had to be ready to react as circumstances demanded.

In a speech at the Athens International Investment Summit, Stournaras, who heads the Bank of Greece, said that last week’s decision to stand pat reflected the ECB’s “prudent, wait-and-see approach in a fluid and uncertain environment.”

“The ECB has mastered a ‘soft landing,’ that is a balancing act of safeguarding price stability, while at the same time fostering an environment conducive to investment, sustainable growth and financial stability,” he said.

Financing conditions had become easier in orderly fashion, thanks to ECB policy, and, along with higher real incomes and government spending, should support a gradual economic recovery over the medium term, he said.

“Preserving the credibility of monetary policy requires flexibility and readiness to adjust the policy stance in a timely manner if needed,” he said. “By keeping inflation expectations firmly anchored to our medium-term target, monetary policy acts as a stabilising force – ensuring price stability, bolstering macroeconomic resilience and mitigating risks to financial stability.”

Due mainly to investment but with some support from private consumption, domestic demand was helping growth this year, he said.

“Looking ahead, favourable financing conditions, improving investment sentiment, and resilient demand are expected to support economic growth, even though risks due to trade policy uncertainty and geopolitical tensions are tilted to the downside,” he said.

The global uncertainty was an “important opportunity for the euro” in the context of “declining confidence in US economic policy,” he said. However, Europe had to deepen its integration, reduce internal trade barriers, complete Banking Union and make progress on a European Savings and Investment Union, he said.

“In particular, in order to increase its investment ratio, it needs to raise the rate of return on domestic investment and channel the largest part of its excess savings into it,” he said.