The European Central Bank (ECB) will review its monetary policy strategy in early 2020 and considers it “advisable” to refrain from “public discussions” before starting to do so, as can be seen from the minutes of its December meeting.
In the minutes the ECB confirms that, although the available economic data are still weak, they point out “some stabilization of the euro area economy“, and that the downside risks for growth remain, but these risks have become 2 somewhat less pronounced ».
The Governing Council considers that more time is needed to see all the effects of the monetary expansion measures that it approved in September, but notes that they have already been effective and have reached the economy.
The ECB also points out that a very expansive monetary policy will be necessary for a prolonged period of time.
The Governing Council also believes that it is necessary to analyze and observe the side effects of its monetary policy measures.
The ECB reiterates that other legislators must contribute “more decisively” to the growth of the euro area and alleviate uncertainties related to trade and geopolitical tensions.
The entity also discussed at its December meeting the need to understand “the economic consequences of climate change.”
Although some policies to mitigate the impact of climate change could have an impact on growth and inflation in the coming years, the ECB emphasizes that its implications for its growth and inflation projections should be carefully analyzed.
At the meeting in early December, members of the Governing Council considered that the response to climate change could lead to “significantly higher investment“, but that the impact on oil and energy prices was uncertain.
The ECB decided in December to continue lending to banks at 0% in weekly refinancing operations and charging them 0.50% for excess reserves.
The European monetary entity will also continue to buy public and private debt from the euro area at a monthly rate of 20,000 million euros until shortly before interest rates start to rise. .