- Board member says economic impact would normally be transitory
- Region's fragile recovery leaves it susceptible to shocks
European Central Bank Executive Board member Peter Praet said the Paris terror attacks may pose a risk to the euro area’s sluggish revival and policy makers will need to monitor data on economic confidence closely.
“Usually these sorts of events have a transitory effect on the economy so this is not a priori a reason to change the way we see the evolution of the European economy,” Praet said in an interview with Bloomberg Television on Monday in Frankfurt. “It’s also true on the other hand that we have a fragile cyclical recovery, fragile with downside risk, and it’s clear these sort of events do not help restoring confidence in the recovery, so this is something we will watch.”
The ECB already plans to discuss fresh stimulus measures next month as a global slowdown in trade threatens to stem the currency bloc’s upturn and undermine an inflation rate that is stuck well below its goal. ECB Vice President Vitor Constancio said on Monday that while markets have remained relatively calm in the aftermath of the Friday attacks that killed at least 129 people, he’s concerned about the potential consequences.
Praet said policy makers will “closely” study incoming economic data, in particular consumer confidence, over the coming days and weeks. Euro-area confidence indicators are due to be released by the European Union’s statistics office on Nov. 27. The ECB’s next monetary-policy meeting is scheduled for Dec. 3 in Frankfurt.
Constancio said separately in Frankfurt that it’s too early to judge the impact of the attacks on the economy.
“Markets so far are taking it calmly and not reacting too much,” he said. “If there would be no further consequences, the impact would not be very significant.”