ECB Coeure: Medium-Term Infl Expectations Firmly Anchored

FRANKFURT (MNI) – Eurozone inflation expectations remain firmly
anchored and the European Central Bank can be relied on to act if any
inflation risks develop going forward, ECB Executive Board member Benoit
Coeure said Thursday.

In prepared remarks for a speech to be delivered in Budapest,
Coeure reiterated that the ECB’s OMT bond-buying program presented
in September is aimed at easing the fears of a break-up of the Eurozone,
which is undermining trust in the euro.

“Medium-term inflation expectations are very firmly anchored, and
the ECB can be trusted to act decisively whenever risks to price
stability materialise,” Coeure said in a speech that was mostly devoted
to a discussion of payment systems in the Eurozone.

Coeure said it was clear that “in some places, trust in the euro as
a standard of value has been undermined by (unjustified) fears of a euro
break-up” [parentheses in ECB text]. The OMT program could help reduce
these fears together with actions at a government level and further
steps towards banking union.

“The ECB’s Outright Monetary Transactions will ease concerns of a
euro area break-up, provided countries make the necessary adjustments;
and the single supervisory mechanism should be promptly implemented to
restore the singleness of euro area banks’ liabilities, then
complemented by a unified mechanism to wind down failed banks,” Coeure
said.

— Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com —

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