STRBSKE PLESO (Slovakia) – Three of the European Central Bank’s policymakers stated on Friday that the bank must consider the end to monetary and financial support during the coronavirus pandemic, even if it displeases the governments.

Pierre Wunsch (Belgian central bank governor), Peter Kazimir (Slovakia) and Bostjan Vasle (Slovenia) were discussing ending the ECB’s extraordinarily stimulative measures. A decision is anticipated in December.

“Now, the name of this game is exit,” Wunsch declared during a panel discussion at an event held in Slovakia.

He said, “And the exit will be difficult because it’s going to focus on less and not more.”

The ECB has pumped 1.4 trillion euro into the bond markets since March 2020. This is how the Pandemic Emergency Purchase Programme of the ECB (PEPP), helped governments to finance massive deficits while borrowing at extremely low rates.

However, this great opportunity was quickly ending according to the trio.

Kazimir, who spoke on the same panel, said that while we are the finance ministers’ closest friends at the moment it isn’t going to last forever.

Vasle, a Slovenean banker and politician said he also saw the “potential to further tensions among central bankers & governments” when ECB policy normalization occurs.

The ECB is likely to end PEPP in March 2022. However, it will continue the smaller Asset Purchase Programme until then. Now the discussion centers on whether or not the ECB should buy more bonds.

Wunsch stated, “I don’t support doubling the stake if it fails but I do believe in patience.”

In September, the ECB stated that it expected inflation to be 2.2% in 2019, 1.7% in 2020 and 1.5% by 2023.

Wunsch expressed concern that September’s price rises could have been 3.4%. He said that the ECB had made too optimistic forecasts and should be careful not to overemphasize temporary aspects of this inflation increase.

According to the Belgian governor, “I feel inflation is going higher than we last predicted.”

The argument that some of this will only be temporary in nature, however, is valid. Sometimes it seems that our focus is too focused on those things.

He said that he believed the ECB will reach its 2% inflation target earlier than anticipated. The market is willing to accept a possible rate increase in December 2022, even if the ECB forecasts for a longer period with record-low borrowing cost.

Wunsch stated that he believes we must communicate the message that the policy will work, and inflation can be brought down to 2%. “I believe that it will take place quicker than we expected six months ago.”