5/29/2019, 1:12 PM (Source: TeleTrader)
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ECB's De Guindos: Euro area not out of woods yet

A total trade war between the United States and China would additionally impact the slowing economy of the Eurozone, according to Luis de Guindos. The vice-president of the European Central Bank told CNBC on Wednesday that an escalation would be "extremely detrimental" and reiterated it may increase volatility in the markets and "quite rapidly" hurt the real economy. He stressed it is not out of the woods yet.

However, the policymaker expressed content with a rebound in economic growth and said it is expected to accelerate in the second half of the year on an annual scale. He said the ECB would announce the pricing for long-term refinancing plans next week at its regular meeting.

Low profitability is affecting equity valuations of banks in the euro area, the top rate-setter acknowledged and noted they are clearly under book values. He cited excess capacity and strong costs as structural issues and suggested consolidation in the sector would boost efficiency. Turning to Italy's dispute with the European Union over excess spending, De Guindos underscored the country must respect fiscal rules but pointed out at the current account surplus as a sign of competitiveness.

Breaking the News / IT