By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Yannis Stournaras said on Tuesday that policymakers should avoid rushing a policy move and remain flexible.

In an interview with Reuters, Stournaras, who heads the Bank of Greece, said he could not rule out a de-escalation of the conflict in the Middle East if negotiations were to begin as early as tomorrow, but also warned of potential inflationary pressures should the war persist, urging the ECB to “show flexibility.”

“Its impact on inflation and output depends on the duration and the ⁠depth of the armed conflict,” he said.

Given the uncertainty surrounding both scenarios, and with inflation prospects still in focus, Stournaras argued that the Governing Council “should not rush” to alter monetary policy. Instead, he said it should remain vigilant and closely monitor developments.

He described the Iran conflict as “another serious supply-side shock” for the euro area, which had dealt with the energy shock triggered by Russia’s invasion of Ukraine in 2022 and the effects of US tariffs introduced last year.

Related articles:

• ECB’s Lane: Middle East Escalation Could Jolt Inflation Higher, Hit Output; ECB “Closely Monitoring”
• ECB’s Makhlouf: “Far, Far Too Early to Come to Conclusions” About Iran Conflict
• ECB’s Wunsch: Should Not “Rush” to React to Energy Price Spike, But Must “Assess” Situation