ECB executive member Isabel Schnabel explained how a ceasefire in the Middle East and falling oil prices are affecting Europe’s economy. While fuel costs have dropped, they remain higher than pre‑war levels, keeping inflation risks alive. Schnabel said that the ECB’s recent rate hike was appropriate, aimed at preventing energy‑driven second‑round inflation. She added that further rate increases may be needed, but their timing depends on the conflict, economy and price developments. The interview also touched on Germany’s fiscal stimulus, noting that increased spending must be paired with structural reforms to sustain growth. Schnabel urged Europe to focus on innovation, integration and sovereignty to boost long‑term productivity.
© European Central Bank, 2025.
Summary derived from the ECB website (https://www.ecb.europa.eu ).
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