ECB’s Stournaras: Inflation and Interest Rates at a “Precarious Equilibrium”

22 December 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Yannis Stournaras said on Sunday that the ECB was at a “precarious equilibrium” with inflation and interest rates at 2%.

In an interview with Spanish daily El País, Stournaras, who heads the Bank of Greece, said that there were “forces acting in opposite directions” with respect to inflation.

He cited the rerouting of Chinese exports to Europe as a downward force and climate and defense spending as sources of upward price pressures.

“We are in a precarious equilibrium, with interest rates at 2% and inflation at 2%,” he said.

Stournaras declined when asked to endorse the idea that next year’s undershooting of the ECB’s inflation objective should lead to further policy easing. “My advice is to wait and see,” he said.

China was not as much of a problem to Europe as were US tariffs and Europe’s own mistakes, he said, citing the still fragmented single market.

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