Piero Cipollone: Interview with ilsussidiario.net

The European Central Bank stresses that removing internal Single Market restrictions is essential to help firms expand and achieve economies of scale, particularly in IT, finance, and manufacturing. Current barriers prevent firms from fully exploiting the 450 million-consumer market, limiting their ability to compete globally. The ECB argues that reducing these barriers would enable the emergence of larger, more efficient firms capable of competing internationally without requiring cross-border mergers. Domestic demand within the euro area also remains underutilized, as evidenced by the current account surplus, which could support growth without creating external imbalances.

The ECB underscores its role in maintaining price stability, which reduces uncertainty and supports firms’ long-term planning. It warns that rapid cost-push inflation could necessitate calibrated interest rate adjustments to avoid dampening already weakened economic growth. While monetary policy cannot address energy price spikes directly, it can anchor inflation expectations to prevent medium-term volatility. The ECB also notes that fiscal policy should play a temporary and targeted role in mitigating external shocks, though such measures are often costly and difficult to implement equitably.

The ECB supports reducing reliance on fossil fuels by increasing the share of renewable energy in the European energy mix. This shift would lower energy costs for firms and households, keeping resources within Europe rather than transferring them to oil-producing countries. The ECB highlights that interventions like the European Commission’s flexibility under the national escape clause for energy security align with this goal, as they enhance competitiveness by stabilizing energy expenses. The transition to renewables is framed as a structural solution to external shocks.

The ECB addresses concerns about protecting real wages amid inflation, emphasizing that reducing dependence on imported energy is critical to preventing wage-price spirals. It argues that long-term real wage growth depends on productivity gains, which require better use of production facilities and improved staff efficiency rather than measures like extended working hours or reduced safety standards. The ECB also highlights the importance of education and training systems in adapting to new technologies and artificial intelligence to boost productivity and competitiveness.