Appointed in November 2023, Piero Cipollone is one of the six members of the Executive Board of the European Central Bank (ECB) and also the most "dove-like," in other words favorable to a more growth-supportive monetary policy. He favors a cut in interest rates at the September meeting, and hints at a second cut by the end of the year. In an interview with Le Monde, he sounds the alarm regarding the weakness of European growth and the fragmentation of the single market, and hopes for wages to catch up to offset the inflation shock.

In June, our projections for euro area GDP growth in 2024 were 0.9%. Data for the second quarter are consistent with these projections, but the most recent data – such as consumer confidence and activity indicators, particularly for the manufacturing sector – have not been so encouraging. This poses a risk to the euro area growth outlook. Investment remains weak, which suggests that firms do not believe in a strong recovery. This also weakens our future growth potential by reducing the capacity of our economy to develop and adopt new technologies to boost productivity.

So does this mean that the ECB is keeping rates too high? Our projections for inflation suggest that we will be back to our 2% target in the second half of 2025. Until then, the inflation figures will fluctuate, but we are broadly on track. These projections are based on market expectations of rate cuts.

We are not pre-committing to any path. We will take our decisions on a meeting-by-meeting basis.

The data so far confirm our direction of travel and I hope that they will allow us to continue to be less restrictive.

Yes, there is a real risk that our stance could become too restrictive. We must ensure that inflation converges to our target without holding back the economy unnecessarily, because we desperately need investment and growth in Europe. Every delay in this area puts us at a serious disadvantage.

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