benoit cœure : interview with bloomberg tv interview with mr benoit cœure, member of the executive board of the european central bank, and bloomberg tv, conducted by ms francine lacqua on 12 june 2017. * * * benoit cœure, thank you so much for speaking to bloomberg tv. now, the ecb seems to be in a rush to exit this accommodative stance. how dangerous is lower for longer? thank you for inviting me. basically the thrust of what the governing council decided last week is to acknowledge the improving economic circumstances, to translate it into a revised forward guidance, because we have to adapt to economic reality, but also to give a sense of patience when it comes to rates being low : we are still not seeing inflation where we would like it to be ; we ’ re still not seeing the criteria that we ’ ve set for inflation to be sustainable all being met. so you need a sense of patience here. how much of a nightmare is stronger gdp on qe? stronger gdp is good news. it ’ s unqualified good news. this has been acknowledged by the governing council last week, and that ’ s why we changed our communication to adapt to the changing reality. it also shows that our monetary policy measures are working. all the jobs that have been created in the eurozone over the last three, four years or so, a lot of them have been created thanks to the accommodative monetary policy stance, so it is working very well. now, we have an inflation mandate, so when it comes to the next steps we ’ ll have to focus on inflation. why was tapering not discussed last week? that wasn ’ t discussed at all. it is too early to discuss it. we have to acknowledge the changing reality. we discussed a lot the economic situation ; we discussed the prospects for inflation. there was a sense of progress also when it comes to inflation where, in spite of the inflation being revised downwards, if you look carefully at the staff forecast, you ’ ll see that inflation is also less dependent on our monetary policy measures, which is one step in the right direction, but it ’ s not yet quite enough to start discussing tapering. we ’ re not there yet. when do you think tapering needs to be discussed? even to just accustom the markets to the idea of tapering. i don ’ t want to give dates here. i don ’ t think it serves

a purpose. the reason being that we ’ re very much data - driven. we ’ re driven by facts. so we ’ ll discuss tapering whenever we see the economic situation and the prospects for inflation are right for discussing it. do you have in your mind a perfect idea – and i ’ m not going to press you on it, but do you have a perfect idea of when tapering should be discussed and what it would look like? no, again, that will depend a lot on the economic numbers ; it will depend a lot on inflation. we obviously have to discuss it before the end of the year. that ’ s obvious given what we ’ ve said on buying bonds until the end of the year and later if necessary. so that discussion will take place, but it will take place when the data supports it. is july a live meeting? i know we were talking about it, but is it a live meeting given that it ’ s july so there ’ s actually usually low volatility in the markets, and given that you ’ re not actually doing any new forecasts? well, we do work in july. it may look nice around, but we do work in july. and as i said, the discussion last week was very much about taking stock of the progress in the economy, taking 1 / 5 bis central bankers'speeches stock of the progress that will support an improved path for inflation, and that ’ s a discussion that we ’ ll have again and again. so one lesson of what we ’ ve decided last week, is that the governing council wants to keep our forward guidance aligned with reality, and that ’ s going to continue. you ’ re one of the brightest minds when it comes to academic economics. why is inflation so low? is it structural, or is it just that we may be counting things differently? no, i don ’ t think it ’ s that much about the statistics. that may play a role, but it ’ s a lot about the changing structures of the labour market, in particular. this is a recovery which is jobs - rich. a lot of jobs have been created and are being created in the eurozone economy, but it ’ s a different kind of jobs. a lot of them are on temporary contracts, a lot of them are part - time, and this produces less inflationary pressures. there will be a time where they are consolidated into permanent, full - time contracts, and then nominal wages will start growing