The official objective of the European Central Bank (ECB) is to maintain inflation at 2% over the medium term. In February, in the euro zone, this amounted to 2.6%, according to data published by EurostatFriday 1er March. This is the fifth month in a row below the 3% mark, far from the peak of 10.6% reached in October 2022. There are now only three countries above 4% (Austria , Croatia and Estonia), and four below 2% (Finland, Italy, Latvia and Lithuania). France is at 3.1%.
Objective almost met? Time to declare victory in the fight against inflation? Not yet, essentially responds the ECB, whose interest rates influence the economy of twenty countries and 350 million inhabitants of the euro zone. Facing the European Parliament, Monday February 26, Christine Lagarde, its president, repeated once again that the account was not there yet: “The current process of disinflation is likely to continue, but the Governing Council needs to have confidence that this will take us sustainably to our 2% target. »
Two days later, Peter Kazimir, the governor of the Slovak central bank, and one of the twenty-six members of the institution’s decision-making body, translated the same thought into everyday language: “There is no reason to rush. A June interest rate cut would be my preferred date. April [la réunion précédente] would be a surprise, and March is excluded. » The meeting of the Board of Governors, Thursday March 7, therefore promises to be without surprise.
Even Yannis Stournaras, who heads Greece’s central bank and is generally considered a dove (i.e. in favor of lower rates), doesn’t see a cut before June. A survey of economists carried out by the financial agency Bloomberg goes in the same direction: they predict on average three rate cuts in 2024, the first in June.
Arm wrestling
However, political pressure is beginning to be felt. The Eurozone economy has entered stagnation since a year. Over the four quarters of 2023, growth was successively 0.1%, 0.1%, – 0.1% and 0%. On the sidelines of the G20 of finance ministers in Brazil, Fernando Medina, the Portuguese minister, openly criticized the ECB on Thursday.
“Several European countries are experiencing a sharp slowdown. In some, there is already stagnation or recession. Right now, the risk of leaving the situation as is is higher than starting the process of reducing interest rates. The economy has already slowed down enough », he estimated. Germany, which represents a third of the euro zone economy, experienced a recession of -0.3% in 2023.
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