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ECB Policymaker: Bank Must Prepare for New Shocks

Published January 27, 2026, 17:08
ECB Policymaker: Bank Must Prepare for New Shocks

Gediminas Simkus, an ECB policymaker, stated that the current ECB policy is appropriate for the circumstances, but the Bank must be prepared for new economic shocks, particularly from the military threat posed by Russia. Despite the ECB's success in keeping inflation under control despite multiple challenges such as US tariffs, the war in Ukraine, and rising food prices, Simkus warns that political turmoil could disrupt this balance. Simkus emphasized that the threat from Russia is of a different nature than trade disputes with the US, as it concerns military aggression. Lithuania and other Baltic countries have long expressed fears of potential Russian aggression, citing cyberattacks and airspace violations. Furthermore, Simkus highlighted the need for the ECB to ensure the resilience of payment systems and the availability of cash in the event of increased risk. He also mentioned the need for banks to be prepared for the effects of climate change. Regarding interest rates, Simkus said the ECB will remain in a wait-and-see mode at the next meeting on February 4, as small fluctuations in inflation are expected. However, he warned that there is an equal chance that the next move will be either an increase or a decrease in interest rates.