00:00I have never commented about decisions taken by the Government Council on Monetary Policy
00:05and I am not going to be there in two weeks because I have finalised my mandate in three days.
00:13But let me say something.
00:15I think that in June the Government Council will have new projections,
00:20an update of the projections.
00:22We will have more data.
00:24I don't know whether we are going to have more clarity with respect to the situation in the Middle East.
00:29It's something that is difficult to say and to tell.
00:33But I think that the approach is the correct one.
00:36I suppose that the Government Council will analyse all this new data,
00:40will take into consideration the situation in the Middle East.
00:46Simultaneously, there are some positives.
00:49For instance, inflation expectations are well anchored.
00:52And I think that simultaneously, well, the impact of this global energy shock
00:58and this global supply shock on growth is something that for sure
01:03that the Government Council is going to consider.
01:05Because, you know, the problem with a supply shock of this nature is that it increases inflation
01:10but simultaneously reduces growth and reduces domestic demand.
01:14And this reduction in domestic demand could reduce inflationary pressures.
01:21How big of a risk do you think is the recession in the euro era, given the risk you just
01:24described?
01:25Well, I think that it's not going to be the baseline.
01:30If you look at, for instance, the growth rate in the first quarter of the euro era was 0.1.
01:37I think that the baseline is not going to indicate a risk of recession.
01:41I think that, well, the situation is clear.
01:44Lower growth and higher inflation.
01:47But this lower growth is not going to produce, it's not going to give rise to a recession.
01:53That's our baseline scenario.
01:54Do you think it's also a matter of credibility, of the ECB's credibility?
01:58Some of your colleagues have said that a rate hike could be possible also to preserve this credibility.
02:03I think that the credibility of the ECB, you know, is much more concentrated on inflation expectations.
02:11Inflation expectations in the middle, in the medium term, are well anchored.
02:18So I think that that's the main gauge of the credibility of the ECB.
02:24I think that the credibility of the ECB is not going to be enhanced because of a rate hike in
02:28June
02:28or a lack of a rate hike in June.
02:30I think that's something much more structural.
02:33Do you think if the ECB were to hike in June, that at least one more step would be needed?
02:38Because just to have an impact on the real economy?
02:41Or would you say that a one and done could also be an option?
02:44Well, I'm not going to elaborate on the potential actions taken by the ECB over the next government council meetings.
02:51But let me say something.
02:53I think that we have to take into consideration the impact on growth.
02:56I think that, you know, the data that we have received so far, inflation immediately, you know, reflects the evolution
03:05of energy prices.
03:06But I think that for growth it's going to take a little bit longer.
03:10But if you look at soft indicators, sentiment indicators, I think that these indicators clearly point at an important impact
03:18on growth.
03:18So, let's take a little bit more.
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