Mersch calls for withdrawal of ECB’s extraordinary stimulus as soon as possible

The European Central Bank’s (ECB) Executive Board member Yves Mersch warned that the ECB's extraordinary stimulus measures are not intended to be permanent and should be withdrawn as soon as possible. Mersch reiterated the ECB’s warning that monetary measures alone can’t sustain the currency bloc’s economic recovery, and that political support is needed.

Mersch said that the euro area's inflation path is not yet self-sustaining. Data released by the Eurostat, European Union's statistical office showed on Thursday that the Euro zone consumer price growth was confirmed at 0.5 pct y/y in October as expected. The ECB aims to keep inflation below, but close to 2 percent over the medium term.

The ECB’s last economic projections in September saw consumer-price growth averaging 1.6 percent in 2018. The central bank will publish revised economic forecasts that run to 2019 for the first time, and Mersch suggested those figures might indicate when the stimulus can start to be wound down.

The ECB is set to decide on Dec. 8 whether to prolong its 1.7 trillion-euro ($1.8 trillion) asset-purchase program past the current end-date of March, and with inflation running well below its target, markets expect an extension.

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