Cipollone sees stagflation risk as remote amid resilient growth
ECB Executive Board member Piero Cipollone dismissed stagflation concerns following supply shocks, pointing to economic resilience and anchored inflation expectations. In an interview published August 24, 2026, he also urged deeper Single Market integration.
Calibrated policy against supply shocks
Addressing potential supply-side disruptions from geopolitical tensions, Cipollone cautioned that central banks cannot directly lower commodity prices but must prevent increases from shifting medium-term inflation expectations.
“In the event of a supply side shock, such as the oil shock, hiking interest rates so as to stabilise inflation around the target could dampen economic growth that is already affected by a negative shock,” he stated.
He characterized stagflation risks as “rather remote,” noting that the euro area economy continues to show resilience while inflation tracks the June baseline projections rather than severe scenarios.
Fiscal support should remain temporary and targeted.
Scale, autonomy and payment privacy
Cipollone highlighted structural hurdles holding back European firms, citing reports by Mario Draghi and Enrico Letta on internal barriers across the 450-million-consumer Single Market.
Expanding cross-border scale and cutting fossil fuel dependencies remain vital for productivity.
On retail payments, following the European Parliament's approval of the digital euro regulation ahead of a potential 2029 launch, he stressed that the Eurosystem cannot track individual transaction data online or offline.
Pragmatic balance over dogmatism
Cipollone prudently rejects reflexive rate hikes in response to external supply shocks to protect growth.
Framing the energy transition as a structural defense against imported inflation gives central bank backing to EU industrial reforms.
His explicit privacy guarantees offer needed political defense for the digital euro ahead of 2029.