2026-01-28 02:25:00
ECB’s Cipollone says Europe’s economic resilience is holding, but geopolitical risks threaten growth and strengthen the case for financial autonomy.
Summary:
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ECB sees geopolitical risks reinforcing case for European payments autonomy
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Euro-area economy remains resilient, with data potentially beating forecasts
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Investment strength supports growth without undermining price stability
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Persistent geopolitical uncertainty risks weighing on investment
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ECB policy focused solely on euro-area inflation outlook
Piero Cipollone said rising geopolitical tensions are reinforcing the case for greater European autonomy in payments and financial infrastructure, while also posing growing risks to the inflation and growth outlook in the euro area.
Cipollone argued that the increasing use of economic and technological tools as instruments of geopolitical pressure has exposed vulnerabilities in Europe’s financial architecture. Against that backdrop, he said the European Central Bank’s push to develop a digital euro and strengthen domestically controlled payment systems is becoming more strategically important. Europe, he noted, still lacks a cross-border payments champion capable of matching the scale of dominant U.S. providers, leaving the region exposed to external dependencies.
Turning to the macroeconomic outlook, Cipollone said the euro-area economy has so far demonstrated notable resilience, with upcoming data likely to exceed earlier forecasts. He attributed recent upward revisions in growth expectations largely to stronger investment, highlighting that higher investment not only supports near-term demand but also expands productive capacity, allowing faster growth without necessarily generating inflationary pressure.
However, Cipollone cautioned that the outlook is becoming more uncertain as geopolitical risks intensify. Persistent uncertainty, he warned, could weigh on business confidence and delay or deter investment decisions. Over time, that would undermine growth momentum and feed through to inflation dynamics, ultimately affecting the real economy.
On monetary policy, Cipollone stressed that the ECB remains firmly focused on its mandate of price stability in the euro area. Developments abroad, including political pressure on other central banks, are only relevant insofar as they influence euro-area inflation and growth conditions. The ECB, he said, continues to set interest rates with the objective of returning inflation to its 2% target over the medium term.
Overall, Cipollone’s remarks underline a dual challenge for policymakers: preserving monetary stability amid an uncertain global environment while reducing Europe’s exposure to geopolitical shocks through greater financial and payments sovereignty.
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Piero Cipollone is a member of the European Central Bank’s Executive Board, the body responsible for steering monetary policy and overseeing the ECB’s ongoing operations. In that capacity, he participates in monetary policy deliberations alongside the ECB President and other board members, and contributes to shaping the institution’s strategic priorities — including price stability, financial infrastructure initiatives like the digital euro, and assessments of economic conditions across the euro area. His public remarks often reflect the ECB’s policy framework and risk assessments on inflation, growth and structural challenges facing the euro-area economy.
ECB’s Cipollone
