ECB’s Šimkus: “I Like the Idea of a Risk Management Cut”

17 October 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Gediminas Šimkus on Friday advocated further ECB monetary policy easing.

Šimkus, who heads the Bank of Lithuania, told Bloomberg, “I like the idea of a risk-management cut. You manage the risks, and in my view, they’re to the downside.”

“The overall story is more to the downside side — both for growth and inflation,” Šimkus said, according to the news agency. “You have the recent deterioration in German industry and a political situation in France that’s likely to lead to more consolidation, which typically means lower growth. Wages are also decelerating in line with our narrative, which should mean weaker momentum in services.”

The euro could strengthen further, while the increased flow of Chinese goods to Europe is dampening prices, he said.

“For me, the forecast for inflation in 2028 will be an important piece of information for the decision in December,” Šimkus said. “If it’s more than marginally below the target, we should act on that.”