(Bloomberg Opinion) — European Central Bank Vice President Luis de Guindos said the eurozone faces a “very difficult economic situation” that will test individuals and businesses.
“The high rates of inflation that we are seeing across Europe coincide with an economic slowdown and low growth,” he told the Spanish Federation of Associations of Young Entrepreneurs in a December 16 interview published Tuesday on the European Central Bank’s website. “It is very important for both individuals and companies to be careful and focus on the long term.”
In his comments, Guindos reiterated the messages from the December 15 interest rate decision, including the new economic outlook released that day. When asked how much borrowing costs will rise, he repeated the ECB’s mantra that this will be decided “meeting by meeting and relying on the data that arrives”.
Guindos also stressed the view that the eurozone is experiencing a “shallow, short-term recession” before the economy returns to growth in the second quarter.
“This situation undoubtedly poses a challenge to companies and their sustainability,” said the vice president. “With a recession looming, the current heightened uncertainty is making it more difficult for companies and entrepreneurs to allocate their capital. So, in this context, it is very important to be careful.”
Original note: ECB’s Guindos sees European economy in ‘extremely difficult situation’
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