Luis de Guindos, vice president of the European Central Bank (ECB)
De Guindos has pointed out that maintaining the current level of rates for a time would represent a “very important contribution” to achieving the objective of limiting inflation to 2%, in addition to underlining that this bet by the markets may or may not be correct. depending on “many factors.”
Spain’s former Economy Minister has stated that “there is a high possibility” that inflation will be controlled if the current level of rates is maintained for a short period. Despite this, de Guindos has warned of the importance of paying attention to the evolution of projections and the effect of rates on financial markets.
The role of the ECB in controlling inflation
For his part, De Guindos has rejected the criticism of those who are against rate increases for making mortgages more expensive, since inflation is the “greater evil” for “low-income” citizens by reducing their purchasing power.
“If we did nothing, we would mainly find that inflation would skyrocket, there would immediately be absolutely crazy inflation expectations,” he assured.
Economy and debt
According to De Guindos, the first half of the Spanish economy has been “relatively good”, although the second quarter has been “weaker” in line with the rest of the European economy, as is the case in Germany. Even so, the vice president of the ECB has noted that the Spanish economy, for the moment, is “very competitive”, given its export component, and has a healthy banking system.
Regarding the possible forgiveness of debt to the autonomous communities, De Guindos has stated that, as it occurs between public administrations, it is “neutral” from the point of view of the debt as a whole, although it does produce “an extraordinary benefit to those affected.” “has forgiven the debt and an extraordinary loss to those who have forgiven the debt.”
However, he recalled that carrying out a general remission will not benefit everyone equally, since the situation in the different regions “is not identical.”
In any case, De Guindos has pointed out that it is “Important to have a government with the ability to act” to prepare proposals and decide on “certain investment projects, especially in the face of “challenges” such as the European and global decline or the rebound in prices. of the oil.
Single supervisory mechanism
On the other hand, the former minister has also referred to the issue of the appointment at the head of the Single Supervisory Mechanism (SSM), regarding which he has stated that “he does not know what the European Parliament will do” after the ECB’s nomination of the German candidate, Claudia Buch, to direct it.
Previously, Parliament valued the deputy governor of the Bank of Spain, Margarita Delgado, as preferable for having more previous supervisory experience. The European Parliament must ratify the decision of the issuing institute.
