By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Peter Kažimír said Friday that the policy discussion had shifted markedly in recent months, with talk of a possible rate cut now replaced by debate over whether a modest increase may eventually be needed.

Kažimír, who heads the National Bank of Slovakia, said at the annual assembly of the Republican Union of Employers in Bratislava that ECB staff scenarios already reflected that possibility, while emphasizing that the timing and eventual need for such a move remained uncertain.

“While just a few months ago there was talk of a possible cut, today we discuss the possibility that a slight increase might be necessary,” he said. “Our forecast scenarios take this development into account as well.”

He did not indicate when such a move might come. “Only time will tell whether that will happen,” he said.

At the same time, Kažimír noted that the current energy shock still looked less severe than the one that followed Russia’s invasion of Ukraine.

“On the positive side, the rise in oil and gas prices has so far been less severe than it was following Russia’s invasion of Ukraine,” Kažimír said. “However, it could still significantly slow down the global economy.”

He also warned that a prolonged conflict would deepen the damage.

“The longer the conflict lasts and the greater the damage it causes, the more severe its negative impact on both the global and Slovak economies will be,” he said.