People wearing face masks walk in front of a big Euro sign in Frankfurt am Main, western Germany, as the European Central Bank (ECB) headquarters can be seen in the background on April, 24, 2020.
Yann Schreiber | Getty Images
LONDON — One of the more hawkish members of the European Central Bank has sought to downplay the division seen at the Frankfurt institution this week, saying that he is still supportive of accommodative policy.
“We all agree we want to be supportive in this phase of the recovery, we all actually want to go to 2% [inflation], so my dissent shouldn’t be dramatized,” Belgian central bank governor and ECB member Pierre Wunsch told CNBC’s Joumanna Bercetche Friday.
Wunsch confirmed that he voted against the central bank’s new guidance on interest rates, announced on Thursday. He said he was reluctant to commit to the potential five or six-year time horizon for dovish policy to remain in place, in line with market expectations, given the possible risks that could force the central bank to change course.
Reports have suggested that Bundesbank President Jens Weidmann also voted against the changes.
“The most important conclusion of the retreat actually, and our new strategy, is what I would call a ‘no regret’ conclusion, in that we all agree that what we have been doing in the last few years was necessary and proportional,” Wunsch said.
“The question is whether this proportionality test that we are going to have to make in the future — whether we can remain proportional in what we do and take commitments over a long period of time, like five or six years in the future.”
“We might be faced with issues of fiscal dominance, issues of financial dominance, and I just, at the end of the day, did not feel comfortable taking a commitment for five or six years.”
Wunsch suggested that he may be “taking forward guidance too seriously,” and told CNBC that some of his colleagues at the ECB had suggested the guidance could be altered again should certain changes to financial conditions arise.
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