Bank of Greece Governor Giannis Stournaras referred to the latest ESCB decisions on monetary policy in an interview with Bloomberg TV, Giannis Stournaras, while commenting on the latest developments on the trade front with U.S. tariffs and their impact on Europe and the euro/dollar exchange rate. At the same time, he highlighted the importance for the Greek and European banking system of the recent agreement between Alpha Bank and UniCredit.

Referring to the ECB‘s interest rates, he said, “we will cut them further if the economy deteriorates and inflation falls further. Commenting on the latest Eurostat data showing that CPI fell to 1.9% for May in the eurozone, he described it as “expected” as the average forecast was for 2%. We had a soft landing, he said, and when asked if we would see further rate cuts after eight cuts in the last year. “What better way than to wait and see. We are close to the end, however we are not done. We have tariffs and geopolitical tensions,” he noted.

If the economy deteriorates and inflation falls sustainably below 2% we will move to cut rates, but that is not expected, he said to add that he has talked about a pause in the cycle of cuts in the past and that this is not unexpected, essentially pointing to a pause in July and the possibility of a new decision in September.

Our forecast is that there are downside risks to growth, and that inflation will ease. We will go meeting by meeting to see what we do next, he said.

Commenting on yesterday’s more “hawkish” stance by the ECB chief. Kirsteen Lagarde, he said he was not surprised and that the difference between “hawks” and “doves” is now not so big. Mrs Lagarde, in my opinion, did not rule out anything, but we do not know what will happen with the economy. The bond market is something else we have to watch, she added.