ECB: De Guindos On ETS2 Considerations After Being Asked On MNI Article
From the Q&A at the MNI Livestream.
Q: The ECB has headline inflation at 1.9% in 2027. I think yesterday MNI had an interesting article mentioning about ETS2 added 0.3pps to 2027 inflation. If that has been delayed will it change your assessment on the ECB outlook?
A; On the ETS we’ll have to wait. It's part of our assumptions that the ETS2 will be implemented. We do not know but it's a decision that the Council and the Commission will have to take accordingly. We'll have to see the consequences in terms of our projections. Let's see what happens. It’s obvious that if eventually this is not implemented or if it’s postponed that it will have a one-off impact on inflation. I understand that you’re looking at the concrete number for 2027 and whether we’re a little bit above or below target but the trend is much more important for us. We are not going to be only guided by this kind of transitory, volatile elements that can have an influence on headline inflation in the short-term. Inflation is something that you have to analyse in a much more holistic approach. We can speculate what’s going to happen with ETS2 whether it will be there or not but I don’t tend to pay much attention to this kind of very concrete and specific developments that can give rise to the opposite movement in inflation for the year or the year after. I do not refer only to ETS.
The MNI Exclusive referred to in the question: https://www.mnimarkets.com/articles/mni-sources-doubts-over-eu-carbon-pricing-key-for-ecb-rates-1758119535064
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