Luis de Guindos is optimistic about the drop in inflation

The vice-president of the European Central Bank, Luis de Guindos, has shown great optimism regarding the drop in inflation in the coming months and has ruled out the possibility of Europe entering a recession in the coming years. His position has clashed with the more pessimistic position of Jordi Gual, former president of Caixabank and current president of VidaCaixa. Both have coincided in a colloquium organized by the Association of European Journalists, the Diario Madrid Foundation and the Círculo de Economía, which have been moderated by the director of CincoDías and deputy director of economic information of EL PAÍS, Amanda Mars, and the editor-in-chief of The vanguardElisenda Vallejo.

“Inflation is going to drop, without a doubt,” the former Minister of Economy stated emphatically before a forum made up of representatives of the Catalan economic sphere, including Josep Oliu, president of Banco Sabadell, and Jaume Guardiola, in charge of the Círculo . Despite his convictions, De Guindos has expressed his doubts about the evolution of underlying inflation due to its “more permanent behavior”, which does not take into account, for example, agricultural products or energy. The CPI for food rose 11% last year, although the person in charge of the ECB has indicated that it is not this item that worries him the most, but the one that concerns the cost of services due to the possible pressure on salary increases . Gual has questioned, precisely, that the increase in product prices can be reduced “quickly” due to underlying inflation.

De Guindos has been very cautious regarding new interest rate increases by the ECB, after last week it approved the seventh increase and raised it to 3.75%, the highest step in the last 15 years. “Are they up? They can stay. How many and how much? Well, it will depend on the conditions and the effect of the hardening of economic activity ”, he pointed out. And he added: “Let’s go meeting by meeting”, in a clear reference to the need to adapt to the evolution of the economic situation.

After the crises of the American banks Silicon Valley Bank and First Republic and of the European Credit Suisse, De Guindos has called not to fall into the “complacency” of the European banking system. And he has reiterated the need for the euro zone to complete a “complete banking union”, with a single deposit guarantee fund, if the European Union “wants to paint something in the world”. This lack, he has said, “is undoubtedly one of the main vulnerabilities that the European banking system has at the moment.” This fact, added to the fact that there is no progress in the capital market union, weighs down the position of the Twenty-seven.

This is “a political issue, of trust in the States”, so that “if Europe wants to paint something in the world, it needs to fill in these gaps, that will make us much stronger”, he has resolved on a fact that Gual has once again pessimistic: “It is not possible in the short term”.

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