February 3, 2020 / 11:28 AM / a month ago

ECB's De Guindos says coronavirus outbreak creates uncertainty

European Central Bank (ECB) Vice-President Luis de Guindos attends an European Union finance ministers meeting in Brussels, Belgium January 21, 2020. REUTERS/Johanna Geron/Files

ATHENS (Reuters) - The European Central Bank sees early signs of stabilisation in the global economy and inflation remaining at the same levels over the next 12 months in the euro zone, the ECB vice president said on Monday, but he cautioned that the coronavirus outbreak in China is creating uncertainty.

Speaking at a conference in Athens, Luis de Guindos said that inflation “will hover at the levels we have now”, but wage growth of above 2% should also be taken into account.

De Guindos added that the outbreak of the coronavirus is among factors that create uncertainty over the global economy’s outlook. The virus has created alarm because it is spreading outside China, including in Europe.

On Greece, a country which emerged from international bailouts in 2018 after a decade-long crisis that rocked the euro zone, De Guindos said that the economy is “on its way for normalisation”.

Greek fiscal policy is now “in a much sounder basis than before” but banks’ non-performing loans were still a “soft spot”, he said. All instruments must be used to help reduce them, he said.

Reporting by Lefteris Papadimas; writing by Renee Maltezou and Angeliki Koutantou; editing by Larry King

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