Bundesbank Executive Board member Sabine Mauderer pointed out that monetary policy normalisation in the euro area is a lengthy process. While net purchases under the Eurosystem’s asset purchase programme are expected to be discontinued at the end of the year, the reinvestment phase will go on for some time, she said at the Banking and Corporate Evening (Banken- und Unternehmensabend) held at the Bundesbank’s Regional Office in Munich. Policy rates are also set to remain at their present levels at least through the summer of 2019, she continued.

However, Ms Mauderer explained, it is crucial for the Eurosystem to quickly return to monetary policy normality if it is to remain capable of taking action. The recent slight dip in real economic data should not be overstated, she noted. The macroeconomic upturn remains intact. The event gathered around 200 guests from the financial sector, trade and industry, politics and academia in the Bavarian state capital, and Ms Mauderer took the opportunity to introduce herself as the new Executive Board member overseeing the Directorates General Markets and Human Resources.

Willingness to embrace reform fading in Europe, according to Mersch

© Klaus D. Wolf

Speaking alongside Ms Mauderer at the event was ECB Executive Board member Yves Mersch. In his address titled “Europe: a work in progress – political integration and economic convergence in Monetary Union”, he asserted that Europe has a problem with implementing solutions rather than with identifying the issues it faces. He explained that, while many of the European framework’s weaknesses have long been known, they have been addressed to only a limited extent due to national interests. “The resilience of the euro hinges on the implementation of the necessary economic and fiscal reforms,” Mr Mersch stressed.