Interview with Luis de Guindos, Vice-President of the ECB, conducted by Petri Sajari

26 November 2024

What are the main risks to financial stability in the euro area, and how could those risks materialise?

To assess the risks, we first need to look at the wider macroeconomic outlook. On the one hand, inflation is declining and will return to our medium-term target of 2% in 2025. But on the other hand, economic growth is very weak. According to the European Commission’s Autumn Forecast published last week, growth in the euro area will be below 1% this year, very much in line with our September projections, with risks tilted to the downside. We will have new projections in December, but developments point to growth remaining fragile. So concerns about high inflation have shifted to economic growth. On top of that, geopolitical risks are increasing and uncertainty about US policy could affect trade and fiscal policy, with broader implications for the euro area economy.

In this context,…