Interview of Bank of Greece Governor Yannis Stournaras with Bloomberg TV
06/02/2026 - Articles & Interviews
L. Burden: Joining me now, I am pleased to say, for an exclusive interview is one of those members responsible for decision making, Yannis Stournaras, ECB Governing Council member and Governor of the Bank of Greece. Good morning to you, Governor. Thank you for making time.
Y. Stournaras: Good morning.
L. Burden: I want to start with the outlook. President Lagarde says that you are in a good place at the ECB. How confident are you that the outlook for inflation growth is going to be able to hold up given just how volatile the backdrop is in geopolitics?
Y. Stournaras: I think we are quite confident because the eurozone economy has weathered the storm of tariffs, of fragmentation in trade of geopolitical conflicts, quite well up to now. So, we have achieved soft landing, considerable growth, 1.4-1.5%, higher than expected, low inflation, very close to the target. So, we are in a stable equilibrium, I would call it.
L. Burden: And the exchange rate was discussed at the meeting, we are told. Are you concerned that the recent euro strength could weigh on inflation more than previously expected?
Y. Stournaras: We are monitoring exchange rates as we monitor all variables that affect activity and inflation. We have incorporated this rise in the value of the euro in the baseline scenario. I think most of the appreciation has taken place in the first quarter of last year. So, it was not something dramatic that should lead us to change our course of action.
L. Burden: The 1.20 level has been cited as the one that complicates matters for the ECB. If a stronger currency keeps inflation below target for longer, how much of an undershoot are you willing to target? Is there a level that you are particularly watching, Governor?
Y. Stournaras: Not really but, still, the values we have seen up to now are within the range of fluctuation that we have seen in the past. So, we don’t feel that we should change the course of action. And okay, the January inflation was a data point. Our medium-term forecast is for 2%, so we don’t see any reason why we should change action.
L. Burden: If we look at the market pricing further out, it looks like markets are expecting easing in the near term but tightening further out. I wonder if you agree with that?
Y. Stournaras: Well, we take into account what markets are saying but we have our forecasts and we do not think that we need to take any action now. Of course, we are data dependent. Meeting by meeting approach, it has proven a very good practice up to now.
L. Burden: So, you are waiting for the data. What data would trigger you for a move up or down? How high is the bar to move?
Y. Stournaras: As you know, we have a reaction function, inflation outlook, underlying inflation transmission mechanism. So far, on the basis of these three principles, where we are, it is a good place. If this changes in the future, we might change.
L. Burden: And hypothetically, from your perspective, is there any value in cutting rates just once more? Is this the case that, actually, if you are going to move, you might as well move more than once or in a deeper move?
Y. Stournaras: We have judged that risks are balanced both ways, both for inflation and growth. It’s one of the, I would say, few cases that we see really balanced risks and that we shouldn’t act on that.
L. Burden: And President Lagarde highlighted technology investment as a bright spot. How do you expect AI to affect euro area growth and inflation going ahead?
Y. Stournaras: Well, we have reviewed the situation of the eurozone, and we have seen some good points that investment is up. Of course, we would like to see a better allocation towards innovation, AI, but investment is up now, is very close to what the US investment ratio is, 22.5% of GDP. Also, we have seen a redirection of demand, necessarily out of exports because of tariffs, towards domestic demand investment and also higher consumption.
So, I think of course we need to do more, we need to proceed with more integration in euro, with the capital markets union, with banking union, with elimination of all constraints for trade but I think the result so far is good and very optimistic.
L. Burden: Governor, there has been growing discussion, just coming back to the geopolitics, about some really extreme scenarios, for example, the breakup of NATO. I wonder how tail risks like that are featuring your thinking when it comes to monetary policy?
Y. Stournaras: Well, we take into account geopolitical uncertainty. There is no question about that. We have our baseline, but also we have scenarios. And as I said, so far, we have weathered the storm quite well. As you know, there is a very high uncertainty worldwide: geopolitics, trade fragmentation and I think we have shown optionality, flexibility, realism and also soft landing. Well, I think the credibility of the ECB is very high now.
L. Burden: Of course, part of the consequence of all this is the rising distrust of US assets or, at least, some are talking about it. President Lagarde spoke about the euro’s global role. I wonder if any exodus from US markets was faster, rapid, disorderly, that wouldn’t necessarily help Europe, would it?
Y. Stournaras: Well, we concentrate on what Europe should do. Okay, it is true that world risks are now favouring the euro. Euro behaves as a safe asset contrary to what happened in the past. So, we take this into account. It is helping our monetary policy cause, I think.
L. Burden: Just finally, Governor, how are you thinking about the risks that are on the French election? If markets start to question fiscal discipline, can spreads stay tight?
Y. Stournaras: Well, markets so far are quite benign. We haven’t seen huge fluctuations in spreads, including France actually. So, markets are expecting that measures will be taken to contain the fiscal problem. So, it is only 20 or 30 basis points since the beginning of the so-called “French budget problem”. So, markets are expecting that France will react positively.
L. Burden: Governor, we appreciate you making time the morning after the decision. I hope you have a good weekend. That is Yannis Stournaras, ECB Governing Council Member and Governor of the Bank of Greece.