WASHINGTON (Reuters) - ECB Executive Board member Jose Manuel Gonzalez-Paramo said on Friday inflation risks have risen in the euro zone and repeated the central bank’s pledge to remain strongly vigilant in the face of them.
“Risks to price stability were and remain on the upside and this is the situation in which a central bank whose mandate is to preserve price stability ... has to remain strongly vigilant,” he told reporters after a speech at Georgetown University.
Gonzalez-Paramo said that questions raised as a result of the sovereign debt crisis about the stability of the euro are misplaced.
“There is no crisis of the euro, there is a crisis of confidence in some specificities of Europe,” he said.
The ECB official said that policy-makers had not changed their outlook for the economy since a recent statement. Japan’s earthquake, tsunami, and nuclear crises and political turmoil in Portugal had added some uncertainty, he said.
“Nothing has really changed in terms of the economic assessment nor the risks to price stability. What was said at the beginning of the month remains,” he said.
“Uncertainty might increase, but it’s an element that we deal with by definition,” he added.
The ECB has held rates at 1 percent for almost two years as the financial crisis and debt crises have unfolded, but signaled earlier this month that a rate hike was likely in April. ECB officials say the central bank has been pushed toward rate increases by faster-than-expected rises in euro zone inflation.
That contrasts with the U.S. Federal Reserve which is on track to end a $600 billion bond buying program by mid-year but has given no signal it intends to tighten financial conditions while U.S. unemployment remains high.