2019.06.10

What conclusions can be drawn from the European Central Bank’s meeting in Vilnius?

Last week Vilnius hosted a meeting of the European Central Bank’s (ECB) Governing Council. The main message that ECB has sent to the market is that key ECB interest rates will remain at their present levels at least through the first half of 2020. In a sense, this means that the ECB has decided to prolong the current period of record-low interest rates for at least 6 months. However, judging by the language that was used during the meeting in Vilnius, the ECB is ready is ready to intervene and embark on fresh economic stimulus measures: the bank is ready to use “all instruments that are in toolbox” if the troubles in the euro zone manufacturing sector start to infect other parts of the economy. Possibility of further rate cuts was also discussed during the Governing Council meeting – but this would have to be matched by an increase in public spending be euro zone’s governments.

Aleksandras Izgorodinas
Advisor on Economy

Phone +370 698 74451
E-mail aleksandras.izgorodinas@smefinance.lt