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ECB Should Prepare for New Shocks, Including Potential Russian Military Threat

Published January 28, 2026, 05:13
ECB Should Prepare for New Shocks, Including Potential Russian Military Threat

The European Central Bank (ECB) should prepare for new economic shocks, potentially due to the military threat from Russia, said Gediminas Simkus, a member of the ECB's council. While the ECB's policy is appropriate for the current situation and the economy has adapted well, the Bank must be ready for unforeseen developments. Mr. Simkus emphasized that the ECB managed to keep inflation on target in 2023, despite multiple challenges such as the war in Ukraine, Chinese dumping practices, and rising food prices. However, he warned that political turmoil is likely to continue and affect economic stability. Furthermore, Mr. Simkus stated that the ECB must ensure the resilience of payment systems and the availability of cash in the event of increased military risk. It must also prepare for the impact of climate change on banks. Regarding interest rates, Mr. Simkus said the ECB will remain on hold at the next meeting on February 4, as small fluctuations in inflation around 2% are expected. However, he stressed that there is an equal chance of raising or lowering interest rates in the future, in contrast to the views of other members of the ECB's Executive Board.

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