Politics
Interview with Die Presse
Interview with Luis de Guindos, Vice-President of the ECB, conducted by Jakob Zirm on 28 April 2025
3 May 2025
Die Presse: Since June 2024 the ECB has already cut interest rates seven times. How long will this period of interest rate cuts last?
Luis de Guindos: This will depend on how inflation develops. But we can be optimistic because our latest forecasts show that, from the end of this year, inflation will be very close to our target of 2%. Moreover, inflation continues to fall thanks to three additional factors. First, the euro has appreciated. Second, energy and commodity prices are declining. And third, the current economic uncertainty about tariffs could lead to greater wage moderation than that already suggested by the latest survey results. All these elements contribute to bringing inflation further down. And this is the decisive factor in whether we continue to lower interest rates.
Where would you place the neutral interest rate, i.e. the rate which neither stimulates nor restricts economic growth? Is this a target for the ECB?
The discussion about the neutral rate is very interesting from an academic standpoint. However, it is not very helpful for monetary policy decision-making because the neutral rate cannot be directly observed. Our decisions are based on how inflation develops, our projections and how our monetary policy is transmitted to the real economy. And, as I said, we are optimistic that we will sustainably achieve our inflation target.
The US Federal Reserve is lowering interest rates much more slowly than the ECB. Is the large interest rate differential between the United States and the euro area a problem?
The situation in the United States and Europe is different. You should look not only at nominal interest rates, but also at real interest rates. In the United States, inflation and inflation expectations are higher than in Europe, due to a different economic outlook. So the interest rate differential is smaller in real terms. In addition, inflation is more persistent in the United States.
We have policy space to pursue our own monetary policy, but of course we are monitoring what is happening in the United States.
In 2022 the euro depreciated massively after the Federal Reserve hiked interest rates half a year sooner. Is there a similar risk again now?
Not necessarily at the moment. Despite all the uncertainties and contrary to expectations, the euro appreciated after the tariff announcements. Exchange rate developments depend on many factors. We do not have any exchange rate objective, but we monitor the exchange rate closely because it is an important macroeconomic variable in our assessment of the risks for price stability.
It is important to moderate exchange rate volatility.
But if the trend reverses and the dollar becomes significantly stronger again, could this fuel inflation in the euro area again?
We are closely monitoring exchange rate developments. But there are currently no signs of a weakening of the euro. Much will depend on how the current dispute over tariffs develops.
The average inflation rate in the euro area is currently 2.2%. However, some eastern European countries still have inflation rates of 3% or 4%. Is inflation really under control everywhere in the euro area?
Differences in inflation developments between countries are normal, it’s the average that is crucial. Our projections show that both headline and core inflation are on track to reach our 2% target. We are paying particular attention to monitoring services inflation, which is strongly influenced by wages. Here, too, we are seeing signs of a slowdown in wage dynamics.
Let’s talk about growth. In March the ECB predicted GDP growth of 0.9% for the euro area in 2025. Is this still realistic given the tariff debate?
You are right – this forecast was made before the announcement of US tariffs. Uncertainty we’ve seen since then has weighed on economic activity and is likely to delay investment and consumption. Uncertainty is always bad for the economy. We already pointed to such downside risks in our March projections. The risks are now materialising.
In Austria, we are in recession for the third year in a row now. Could the entire euro area slide into a recession?
No, our baseline continues to expect very low but positive growth. It’s well below potential growth, but I don’t think that the euro area is heading into a recession.
US tariffs are currently suspended. How bad would the damage be if the trade war were to escalate?
An all-out trade war would have a very serious impact on growth. I really hope it doesn’t come to that. It is also important to take the diversion effects that can occur in trade flows into account, making the consequences difficult to predict.
US President Donald Trump recently launched a mass attack on the Federal Reserve and its Chair Jerome Powell. What are the consequences of such an attempt to exert political pressure on the work of central banks?
The independence of central banks is crucial. It is key to their credibility and thus to combating inflation. Even when inflation was extremely high two years ago, inflation expectations in Europe remained anchored because the central bank was considered independent and credible. This credibility is essential to keep inflation expectations under control and, in particular, to avoid wage-price spirals.
There has been a discussion on whether the euro’s role as a reserve currency could be strengthened if confidence in the US dollar declines. Do you see that as possible?
The dollar is clearly leading as a reserve currency. The international importance of the euro is a lot less in comparison. Its future development depends on us, however. If Europe builds stronger capital markets and establishes itself as a true single market, the role of the euro at international level could be strengthened. Closer integration and a more pro-European approach are crucial.
What would be needed to create a true European capital markets union?
Three central pillars would be needed. First, we need a true single market – barriers and national legislation that impede further integration must be removed. Second, we need to complete the banking union. We already have single supervision and resolution, but we still lack a common deposit guarantee scheme. Third, we need to further develop the capital markets union itself. These three elements are interconnected – progress in one area is difficult without progress in the other two.
Many support the capital markets union but little progress has been made. Who is blocking it?
The problem is that without a true single market for goods and services, the capital markets union is also difficult to implement. The banking union is more advanced but there is still a lot to be done. Capital flows follow the real economy, which is why we need integrated goods and services markets.
In this situation, does it help if national governments block cross-border bank mergers – as is currently the case in Germany, where UniCredit wishes to buy Commerzbank?
I will not comment on any specific mergers. But in general, we support cross-border mergers because they are necessary to create truly European banks and complete the banking union.
Is there too much nationalism in the European financial system?
Sometimes there is too much national focus. But there is a growing awareness that Europe needs to become more independent. And the only way to remain relevant on the world stage is to be more European and a little less nationally focused.
The European Commission is now also pushing ahead with the simplification of European regulation. This also applies to the financial market of course. Where should economic activity be made easier for businesses?
The ECB has set up its own high-level task force, which I coordinate. It’s meant to draw up proposals by the end of the year, which will be passed on to the legislator. This may involve, for example, the implementation of Basel III or reporting, which could be streamlined, or the simplification of bank capital structure, to make it clearer and more understandable for investors. However, simplification does not mean de-regulation, it should not jeopardise banks’ solvency.
When inflation was high, many euro area countries steeply increased their debt and the ECB bought many government bonds, which amounted to some 30% of the outstanding volume in the case of some countries. Is that a problem?
Those measures were necessary in the context of the pandemic. But now we need to increase defence spending and preserve fiscal sustainability at the same time in order to avoid rising market interest rates and thus lower private investment. That won’t be easy.
The Austrian central bank has reported annual losses of more than €2 billion in the past two years. This was due to the purchase of low-yield government bonds. Is that the hidden price of expansionary monetary policy?
Our monetary policy is not determined by the profit and loss accounts of the central banks. Looking back, central banks have made significant gains over the past ten years. The current loss is a consequence of the high liquidity in the market, on which central banks have to pay higher interest rates. However, this liquidity is currently being reduced at a fast pace. The situation will improve in the future.
Are the high debt levels of euro area countries jeopardising future growth?
When markets have doubts about debt sustainability, market interest rates rise, which can reduce private investment. That is why a credible and sustainable fiscal policy is crucial.
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Politics
Press release – World Press Freedom Day 3 May: defending media freedom to safeguard democracy
European Parliament President Roberta Metsola, Vice-President Sabine Verheyen and Culture and Education Committee Chair Nela Riehl stress the vital role of independent journalism.
President Roberta Metsola said: “A free press is the best shield for democracy. Journalists must be free to report without fear of censorship, intimidation, or retaliation. The European Parliament will always defend and stand up for media and press freedom – not only on World Press Freedom Day, but every day.”
Sabine Verheyen (EPP, DE), Vice-President of the European Parliament and chair of the Working Group on the implementation of the European Media Freedom Act (EMFA) said:
“On World Press Freedom Day, we reaffirm our commitment to one of the fundamental pillars of democracy: media freedom. Free, independent, and diverse journalism is essential to any democratic society. However, it remains under threat – even within some EU member states – and without it, democracy cannot function. The European Media Freedom Act (EMFA), passed in April 2024, is vital in addressing these challenges. It sends a strong message about the need to protect media diversity and journalistic independence across Europe. Media is more than just an industry – it shapes political discourse, drives cultural development, fosters social inclusion, and safeguards fundamental rights.
“The EMFA represents a historic milestone for the EU: for the first time, a comprehensive European law is in place to uphold press freedom and media pluralism. We have made significant legislative progress in shielding journalists from political interference and economic pressure. But these protections now need to be actively enforced.
“The EMFA is already taking effect. The first provisions have officially entered into force, with the next set to follow this month. By August 2025, the most significant parts of the law will come into effect, marking a major step in strengthening media freedom across the EU. However, the real impact of the EMFA depends on its implementation. That is why we are already monitoring the process closely to ensure that member states do not delay its enforcement. Press freedom cannot wait – we must act upon these commitments.
“On this World Press Freedom Day, we have to remember the importance of standing firm in defending media freedom. Troubling global trends remind us that indifference is not an option. Even in Europe, we must remain vigilant in upholding our democratic values. Press freedom is the backbone of democracy – defending it means protecting our freedoms and the values we hold dear.”
Nela Riehl (Greens, DE), Chair of the Committee on Culture and Education, said: “An independent press sector is an essential pillar of our democracy. We need a free press to hold our decision makers accountable, advance social change, and keep citizens informed. I am concerned about the drastic increase in young people’s exposure to news from unverified sources on social media. Quality journalism is competing with algorithms on social media platforms for our attention. To minimise the spread of harmful disinformation, the EU is now starting to regulate digital platforms, but we also need to improve media literacy, make sure people have access to accurate information, and provide education on media consumption.
“This should be a high priority for civic education, with clear targets as we work towards improved democratic resilience across Europe. As a committee, we are pushing these challenges up the European education agenda, and we welcome the first steps in this direction under the Commission’s “Union of Skills” initiative.
“My recent visit to Ukraine reminded me of the power of citizens to counter threats to democracy. When the manipulation of information is weaponised, strengthening and protecting people – namely independent journalists, reporters, media professionals, and volunteers – is a matter of security as well. Accordingly, this World Press Freedom Day, we also emphasise the need to make work environments safe for the independent press, with liveable working conditions, a supportive European infrastructure, and protection from persecution.”
The chairs of the Civil Liberties Committee, the Human Rights Subcommittee and the Special Committee on the European Democracy Shield are also issuing a statement to mark the World Press Freedom Day. You can read it here (available soon).
How Parliament strengthens media freedom
In early 2024, Parliament and Council adopted new rules to protect freedom of media and the independence of journalists in the EU. The provisions of the Media Freedom Act (EMFA) will become fully applicable in EU member states as of 8 August 2025.
These provisions should ensure transparency of media outlet ownership and of allocation of state advertising, strengthen public media independence, and secure robust protection for journalists and their sources. To ensure visibility and pluralism, digital platforms will be prevented from arbitrarily deleting or restricting independent media content.
A directive to protect journalists and civil society activists against strategic lawsuits seeking to silence critical voices must be transposed into national law in all EU member states by 7 May 2026.
Every year, the European Parliament rewards outstanding journalism that promotes or defends the core principles and values of the European Union, such as human dignity, freedom, democracy, equality, rule of law, and human rights. The fifth edition of the Daphne Caruana Galizia Prize for Journalism will be launched later this month.
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On 30 April 2025 , the Health and Digital Executive Agency (HaDEA) hosted a virtual info session on the newly launched call *DIGITAL-2025-EDIH-AC-08: European Digital Innovation Hubs – Associated Countries (EDIHs with reinforced AI focus) , * under the Digital Europe Programme .
The event provided stakeholders from academia, industry, public institutions, and research organisations an opportunity to learn more about the funding opportunities, the application process, and key requirements for submitting competitive proposals. Participants also engaged in live Q&A sessions aimed at clarifying eligibility criteria and submission procedures.
Two Strategic Objectives
The call is divided into two main topics, each targeting specific strategic goals:
1. DIGITAL-2025-EDIH-AC-08-COMPLETION-STEP: Completion of the initial EDIH Network
This part of the call aims to expand the existing network of European Digital Innovation Hubs (EDIHs) by including entities from Bosnia and Herzegovina and Moldova . The objective is to enhance the overall performance and capacity of the EDIH network to address digitalisation needs at local, regional, national, and EU levels.
- Total Budget : €2 million
- Focus : Completing the pan-European coverage of the EDIH network
- Eligible countries : Bosnia and Herzegovina, Moldova
2. DIGITAL-2025-EDIH-AC-08-CONSOLIDATION-STEP: Consolidation of the EDIH Network with AI Focus
This topic seeks to strengthen the EDIH network by selecting new hubs from Seals of Excellence holders in four associated countries: Albania, North Macedonia, Türkiye, and Ukraine . These new EDIHs will have a particular emphasis on artificial intelligence (AI) , supporting the EU’s broader strategy to become a global leader in trustworthy AI.
- Total Budget : €9 million
- Focus : Reinforcing AI capabilities across the extended EDIH network
- Eligible countries : Albania, North Macedonia, Türkiye, Ukraine
What Was Covered in the Info Session?
Presentations delivered during the event included:
- Policy Context : Overview of the Digital Europe Programme and the role of EDIHs in bridging the digital divide across Europe.
- Legal Validation and Financial Capacity Assessment : Key steps applicants must follow to ensure compliance with funding rules.
- Strategic Technologies for Europe Platform (STEP) : Insights into how EDIHs can align their activities with priority technologies identified by STEP.
- Submitting a Successful Proposal via the Funding & Tenders Portal : Practical guidance on navigating the online submission system.
- Support with Proposal Preparation : Tips and resources available to help applicants develop high-quality proposals.
All presentation materials are now available online , offering a valuable resource for prospective applicants preparing their submissions.
Building a Pan-European Digital Ecosystem
The expansion and consolidation of the EDIH network represent a crucial step toward achieving a truly inclusive and geographically balanced European digital innovation ecosystem . By reinforcing AI capacities and extending coverage to associated countries, the EU aims to support SMEs, public authorities, and citizens in adopting advanced digital technologies.
“This call is not just about funding—it’s about empowering regions, building expertise, and ensuring that all parts of Europe can benefit from the digital transformation,” said a HaDEA representative during the session.
Next Steps
Interested applicants are encouraged to review the call documents and presentations on the Funding & Tenders Portal and begin assembling their consortia. The deadline for submission is expected to be announced shortly.
For more information and updates on this call and other Digital Europe Programme initiatives, visit the HaDEA website or contact HaDEA directly via the Funding & Tenders Portal.
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Every year, on 9 May, people across Europe celebrate the anniversary of the Schuman Declaration, which was a milestone to bring peace and solidarity in Europe. This year is particularly special as it marks the 75th anniversary of this historic moment.
Let’s celebrate together
To celebrate this occasion, the EDPB takes part in the EU Open Day, with an interactive stand hosted by volunteers from the EDPB Secretariat and national Data Protection Authorities (DPAs). Come and visit us to learn more about data protection and the EDPB’s activities.
You will find the EDPB and EDPS stands at the European Commission’s headquarters – the Berlaymont building – Village 1 “A Democratic Union”, on Saturday 10 May from 10:00 to 18:00.
Do you want to learn more about privacy and data protection — and test your knowledge?Come visit us for fun activities and quizzes designed just for you!
Further information about Europe Day 2025
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