Praet Tells Future ECB Chief Economist His Job Will Be Easier
Praet Tells Future ECB Chief Economist His Job Will Be Easier
(Bloomberg) -- Go inside the global economy with Stephanie Flanders in her new podcast, Stephanomics. Subscribe via Pocket Cast or iTunes.
The European Central Bank’s outgoing chief economist told his successor that he expects his time at the core of the institution’s policy-making will be easier.
“I was thinking, Philip, when you’ll be sitting here in eight years, what will be the farewell for you? The first thing I thought about this was that actually you’ll have a good time compared to me,” Peter Praet said at his farewell colloquium in Frankfurt on Wednesday, addressing Ireland’s Philip Lane, who will take replace him on the Executive Board on June 1.
“The banking union and the capital markets union will be completed,” he explained, perhaps optimistically. “Structural reforms will be taken and implemented, which means that the potential growth rate will be up, which means that natural growth will go up, which means nominal rates will go up, and that means that you get rid of the lower bound issue that we faced in the last few years.”
In the lighthearted discussion, Praet suggested that fiscal policy might even follow a sustainable path among euro-area countries during Lane’s term, meaning the issues around creating a so-called European safe asset “will be basically solved.”
He also offered some words of advice to his successor.
“It’s essential to keep this strong group,” he said, referring to the ECB’s Governing Council of policy makers. “Even if there are different opinions what we should do or what we shouldn’t do.”
To contact the reporters on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net;Piotr Skolimowski in Frankfurt at pskolimowski@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Craig Stirling
©2019 Bloomberg L.P.