And I have to say you have been to a lot of these president, how is this year different?
What's your takeaway from this year's Confab? So today is the second day, but I have to say
it's a very special meetings. We are living in complicated times, maybe more compared to the
years before many geopolitical risks. And this is part of the discussions we have in our
meetings. So when you talk about geopolitical risks often that's code for will Donald Trump
become the US president or will Kamala Harris become the US president? It seems like that's
very much a focus under the hood and not so under the hood here at the meetings. How much
is that dominating your discussions? I think now it's 12 days ahead of the US election. What
I definitely will not do, I will not speculate who will win this race. But what is also
clear that we have to discuss different scenarios because it comes with an impact. So
this is also for sure, especially for Europe. So this is also part of the discussion to think
about what could happen. What are the spill overs to the global economy? I think these are
important questions that are arising from the US election. How much do you see Germany's
economy as being affected? What are the scenarios for you if one candidate wins over
another Germany is a large open economy. So we are very export oriented. So all this
discussion about terrorists that are harmful to Germany, I believe, definitely not helpful
for both parties, both sides of the Atlantic. I think we should more or less consider all
this and find out what can we do? I think we have to talk to each other, but there would be
very severe consequences when terrorists would be intrusive in the way they are being
discussed. Do you think that they would be inflationary for Germany? Yes, there is a
certain probability if that is more or less getting into a direction that the exchange rate
is being influenced by the tariffs. Yes, there is a certain risk that this could also have
disinflationary effects, disinflationary effects. It could be when the
Euro is depreciating against the US dollar, then imports are getting more expensive or they
could have some, let me say, could push inflation up. So there's a real question here
about the inflation ramifications of this and we can go into China and how that plays a role
too with the overcapacity coming in and whether that would actually lead to potentially
lower prices in goods. But right now, it seems like certainly the conversations we have on
surveillance. People are talking about how, why isn't the ECB cutting more? Especially when
the growth outlook. Isn't that great? We got P MS out of the region this morning. You've been
actually one of the more cautious among the committee to really cut rates. Why I think we
showed our commitment. It's not just me, I think, let me mention here, we have a clear
mandate, a single mandate. This is price stability and we were very committed. When we
fought against inflation, we hiked 10 times now. We lowered three times the inflation rate.
We are on track. We have, we are rather confident that we will achieve our target maybe
by midst of next year. So this is a success story. We shouldn't forget that. And I have to
repeat that we are data dependent on our single mandate to achieving price stability. OK?
But we have had actually inflation come in below the 2% target in the euro region. We've
seen growth really materially slow. Haven't you already achieved the goal? I think it was a
single month that September month inflation came out lower than we thought on that basis.
We decided last week to lower interest rates by 25 basis points, but we shouldn't be too
hasty. We should be cautious, keep our track to really look at what data is
coming in. We have in December when our next meeting is coming, we have our new projection,
the new projection will include the year 2027 and then we have maybe more guidance and more
orientation. But I am not in favor to speculate too much what is necessary in our
December meeting. This is definitely I believe not helpful to speculate, to speculate about
what we could do or what we could not do. So, so I will, so I will, we will have all the
optional and these opal are based on the data that we have in December. And we shouldn't
forget we started the interview by thinking about what are the uncertainties, geopolitical
risks, then we are behind the US election. So we have more information on what's going on and
then, and then we can take decisions. OK. So you're saying that actually you are open to a
range of potential decisions, you just are trying to be open minded. So are you open to
even an outsized rate cut at some point this year or do you think that it's important to go
in 25 basis point increments again, I will not speculate because I think this is not helpful.
I think. So we did our job in a way over the past 2.5 years gave clear
indications that we are thinking from meeting to meeting data dependent in an uncertain world
and that worked pretty well and I will more or less stay on that course and I will react and
decide when I have new information. So there has been a lot of discussion about how the US
is the Federal Reserve of the US is a dual mandate central bank. And there is this focus
on both inflation as well as employment as well as the labor economy. Do you feel like
your hands are tied because of the single mandate over at the I think the euro system,
the euro itself is a success story over the last 25 years, 25 years now. And we are not a
political union. We are not a fiscal union, we are not a capital market union, we are not a
banking union. Our mandate, our single mandate is crystal clear price stability and we achieve
price stability over the course of the last 25 years. And so we shouldn't change our
strategy in a phase where it is really complicated to do monetary policy. I guess that
some people would argue that for many years, the was combating deflation risks. It was an
inflation risk, it was price stability in the opposite direction. How concerned are you about
that? I think also in the period of deflation, we were very flexible. We changed
our ways, we are doing monetary policy, introduced new instruments, but also we showed
our capacity to adapt to a new situation. And where did that all came from? We shouldn't
forget that it was the 24th of February 2022 when Russia started this war
against Ukraine and then we changed our strategy. We hiked 10 times inflation went up
to more than 10%. So it was really a very complicated situation and we did well, I really
have to, I have to repeat myself. And this goes to the question of, are those tools still
in your toolbox? Could you see a scenario where you could go back into the negative rate
policy up to? Now, I do not see such a scenario. This was really very exceptional,
very special circumstances. I see a scenario that we are coming back to our target to 2%.
Then we are ending. I do not know where. So this is also this discussion about the new to,
I cannot tell you where the new to are. This is also dependent on the data and we will see
where we end when it comes to Germany's economy, it has entered recession, it has
declined in terms of growth contracted. What do you think it will take for it to grow again?
I think first of all, yes, the term economy could do better but often I have been very
surprised that so many see the German economy so negative. This is not the case. Yes,
the last two years we are complicated. German government did well to overcome. For example,
the energy crisis in 2022 there is a certain probability that there is stagnation this year,
maybe slightly negative but also next year. And the IMF is more or less forecasting that we
are going back to a gross path, not a high gross path 0.8. But this is not as bad
as some of us, more or less address it when they are commenting on the term.
So do you think that it is an inaccurate assessment to talk about the auto manufacturers
structural maybe challenging, precise enough? I think yes, there are structural issues. So we
have to do our homework. I think we have to do more investments. We have to invest in all the
future new developments in A I digitalization. We have to overcome our
demography problems. So there are several things we can do, but we know how we can do it.
And we shouldn't forget in the past, taking the experience from the past German industry is
a very capable one. We shouldn't underestimate the adaptation capacity, maybe strength of the
German economy. So I'm rather positive and even the IMF today said it, we
shouldn't underestimate Germany. There is a good chance that we can more or less. There is
a good comeback chance if Donald Trump gets elected president of the US, do you still think
that that comeback chance is equal? As I said from the beginning, I will not speculate who
will win the US.