PARIS (Reuters). – There’s no need for the European Central Bank or the Bank of France to raise rates in the period between now and 2022 because eurozone inflation will fall below the ECB target of 2%, Francois Villeroy-de Galhau, Bank of France governor said Tuesday.

Additionally, he downplayed concerns that China Evergrande Group’s current liquidity crisis might have an even wider impact and said, “There will not be contagion from outside China.” It is an extremely serious issue for Chinese authorities.

Villeroy is a member ECB’s policy setting governing council. Villeroy stated to France Info radio that total inflation in the Euro zone of 19 countries must be below 2% by year end.

Christine Lagarde (ECB President) stated that Europe’s current inflation rise was only temporary. There were also no indications that this recent increase in wage growth is permanent.

“Today’s inflation rate is slightly higher than 2%. However,… Villeroy stated that he believes overall inflation will fall below 2% by next year. France Info.

“There is no reason today for the European Central Bank (ECB) to raise interest rates in next year.”

Villeroy answered a question about whether Evergrande’s liquidity crisis might lead to global contagion, as did the 2008 collapse at Lehman Brothers. Villeroy stated: “The primary consequence will be some slowdown of Chinese growth.”

Evergrande, the property developer, is in default of a string of bond payments. This has caused turmoil on global markets.