ECB’s De Guindos says coronavirus outbreak creates uncertainty

The European Central Bank sees early signs of stabilization in the global economy and inflation remaining at the same levels over the next 12 months in the eurozone, the ECB vice president said on Monday, but he cautioned that the coronavirus outbreak in China is creating uncertainty.

Speaking at a conference in Athens, Luis de Guindos said that inflation “will hover at the levels we have now”, but wage growth of above 2 percent should also be taken into account.

De Guindos added that the outbreak of the coronavirus is among factors that create uncertainty over the global economy’s outlook. The virus has created alarm because it is spreading outside China, including in Europe.

On Greece, a country which emerged from international bailouts in 2018 after a decade-long crisis that rocked the eurozone, De Guindos said that the economy is “on its way for normalization”.

Greek fiscal policy is now “in a much sounder basis than before” but banks’ non-performing loans were still a “soft spot”, he said. All instruments must be used to help reduce them, he said. 

[Reuters]