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Political risks have diminished after French election: ECB's Weidmann
May 18, 2017 / 8:20 AM / 6 months ago

Political risks have diminished after French election: ECB's Weidmann

FRANKFURT (Reuters) - Political risks for the euro zone and its economy are lower following the presidential election in France, ECB Governing Council member Jens Weidmann said on Wednesday, adding that even existing political risk might not hamper the bloc’s economy.

FILE PHOTO: Central Bank (Bundesbank) Chief Jens Weidmann attends a press conference after the Franco-German Financial Council meeting in Berlin, Germany, September 23, 2016. REUTERS/Axel Schmidt/File Photo

French voters elected pro-European Union centrist Emmanuel Macron in early May. He beat the right-wing and eurosceptic leader of the National Front, Marine Le Pen.

“The political risks have diminished somewhat”, Weidmann, the president of Germany’s Bundesbank and a member of the decision making body of the European Central Bank, told an audience in Frankfurt. “And I would say that even existing political risks might not harm the euro zone economy because of lower spill-over effects.”

Turning to monetary policy he repeated his stance that the ECB should think about winding down stimulus - asset purchases and ultra-low interest rates - when growth picks up and inflation increases towards the ECB’s target of just below two percent.

“If that’s the case then we should think about reducing the monetary stimulus,” he said.

Reporting by Andreas Framke Editing by Jeremy Gaunt

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