The European Governing Council met on Thursday in Firenze and kept interest rates unchanged as expected prompting little attention. The meeting was followed with Fed’s announcement that it was to lower its interest to 3.75-4%. Yesterday, Eurostat issued a flash estimate of inflation in the Euro-area in October coming at 2.1% in accordance with the ECB’s expectations.
During her press conference in Firenze, The ECB Chief said that average mortgage rate in the Euro rate has remained at 3.3% and there was a decrease in bank lending in September due to perceived rising risks by banks. She also said that global risks may start to decrease following President Trump’s peace deal in the Near East and the EU’s trade deal with the US.
What the mainstream found interesting in Christine Lagarde’s press conference is her announcement that the ECB will roll-out the second phase of the Digital euro. The ECB issued a press release about this here. The press quoted her statement i na way that provided the impression that work is underway to roll-out the digital Euro.
There is no work or process ongoing to roll-out the digital Euro at all and what the ECB is saying is that it is ready to roll-out a pilot project once the EU introduces the legislation for the Digital Euro. There has been no legislation presented about the Digital euro so far and the ECB doesn’t have a legal mandate to roll-out the Digital Euro. The ECB President has urged the EU in her statement to introduce legislation for the digital Euro and the press release by the ECB echoes the same demand.
The ECB President has also urged the EU to roll-out the legislation for the Capital and Banking Union.
Clearly, the ECB President and the Governing Council used their announcement on Thursday to put pressure on EU legislators to accelerate their work on introducing two very important legislative items that will bolster the Euro on an international scale. The President of the ECB reiterated that the Digital Euro is needed for Europe’s security and sovereignty. On the other hand the capital and banking union is needed to improve intra-European trade. The ECB Chief has also been an advocate and supporter of Mario Draghi’s proposals to strengthen the European Union.
Prior to the meeting with the Governing Council, the ECB President also visited the Sant’Ambrogio market in Firenze.
Full speech by President Christine Lagarde here.
Newsroom
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