FRANKFURT (Reuters) – Governments of euro zone member states must end aid measures taken since last year to mitigate the impact of the energy crisis on households and businesses at risk of fuel inflation further, European Central Bank (ECB) Vice President Luis de Guindos said on Thursday.
“As the energy crisis abates, governments must remove crisis-related support measures quickly and in a concerted manner to avoid building inflationary pressures over the medium term, which would stronger monetary policy response,” he said.
According to Luis de Guindos, the budgetary policy implemented by the Member States will be an important element in terms of future inflation prospects.
The ECB has raised interest rates by a total of 375 basis points since July 2022 to rein in demand and rein in inflation that still remains high, with price inflation in the bloc coming out in April at 7.0% on a year, against a medium-term objective of 2%.
(Report Francesco Canepa; Claude Chendjou, edited by Blandine Hénault)
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