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Mario Draghi, president of the European Central Bank (ECB).
Central bankers gathered in Berlin Wednesday confirmed the European Central Bank (ECB) is set to finally discuss the end of its massive bond-buying program — something that its President Mario Draghi has so far refused to do.
Speaking at a conference, the ECB’s Chief Economist Peter Praet said the bank will discuss next week how to wind down its 30 billion euros ($35 billion) monthly-purchase program — implemented in 2015 to revive the euro zone economy following the sovereign debt crisis.
“Next week, the (ECB’s) Governing Council will have to assess whether progress so far has been sufficient to warrant a gradual unwinding of our net purchases,” Praet said about the meeting due on June 14 in Latvia.
The discussion will be based on recent inflation data, which is the key element that supports ECB decisions.
Signals showing the convergence of inflation towards our aim have been improving, and both the underlying strength in the euro area economy and the fact that such strength is increasingly affecting wage formation supports our confidence that inflation will reach a level of below, but close to, 2 percent over the medium term,” Praet said Wednesday.
Figures released last week showed that consumer prices rose sharply in the euro area. Annual inflation hit 1.9 percent in May from 1.2 percent in April. Excluding energy prices, which have risen strongly in the past weeks, inflation stood at 1.1 percent in May, from 0.7 percent in April. The ECB, and in particular its president, need strong evidence that inflation is nearing its 2 percent target in order to exit is huge stimulus program.