Inflation in the euro zone faces downward risks in the medium term, although price growth has returned to the 2% target set by the European Central Bank (ECB), said the entity’s head of economic policy, Olli Rehn, according to an article published on Saturday.
The sharp drop from the peak of 10.6% reached in October 2022 to around 2% today was achieved without triggering mass unemployment or a serious slowdown, Rehn told Italian financial magazine Milano Finanza.
“The good news is that inflation has stabilized around the ECB’s symmetrical 2% target, supporting real incomes in Europe,” the official said. “Our latest forecasts suggest that inflation will remain slightly below 2%.”
Rehn also urged EU leaders to resolve a stalled plan for a “reparation loan” to Ukraine financed by Russia’s frozen assets, calling it “essential, even existential.”
He rejected speculation about the ECB’s involvement, saying such a move would breach the EU Treaty’s ban on monetary financing.
Instead, it backed a European Commission proposal under Article 122, often called the “EU emergency clause”, which gives the bloc’s Council the power to adopt measures proposed by the European Commission in exceptional circumstances, bypassing the ordinary legislative process and the European Parliament.
“All Europeans should support the use of frozen Russian assets to help Ukraine,” he said.
