ECB's Santos Pereira: monetary policy has done its job, no need to change rates

European Central Bank policymaker Alvaro Santos Pereira urged governments to do more to lift growth in the ‌euro zone, saying ECB policy had done its work to support the economy and there was no reason to ⁠change interest rates.

European Central Bank policymaker Alvaro Santos Pereira urged governments to do more to lift growth in the ‌euro zone, saying ECB policy had done its work to support the economy and there was no reason to ⁠change interest rates. The eurozone is in a "situation of price stability," he said, adding the ECB expected inflation levels to remain around its target of 2%. "If (inflation) continues like this, ​there are no reasons to change monetary policy, which has already done what ‍was needed to help the economy when it was necessary," he said in an interview with public broadcaster RTP late on Wednesday.

Santos Pereira, who is also governor of the Bank of Portugal, ⁠said that ‌if growth were ⁠sluggish in the European Union, it was not the fault of ECB policy. He urged the EU ‍to deepen the single market in areas, including services, transport, electricity to fully harness Europe's ​450 million consumers.

"What is needed now is for governments and the European Union ⁠to move forward with structural reforms that enable countries to grow more," he said. Last month, the ⁠ECB kept policy rates unchanged and raised some of its growth projections, cementing market expectations that it would keep its 2% deposit rate steady for many ⁠months. The ECB sees inflation dipping below 2% in 2026 and 2027, mainly because of ⁠lower energy costs, ‌before returning to the medium-term target in 2028. It expects the euro zone to grow 1.2% in 2026, down from ⁠an expected 1.4% in 2025.

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