ECBs Schnabel: Return to 2% target in a timely manner is becoming more and more likely

ECB’s Schanbel is speaking. Some highlights from her speech:

Monetary policy cannot solve structural problemsReturn to 2% target in a timely manner is becoming more and more likely despite elevated services inflation and strong wage growthGrowth in the euro area has become increasingly uneven in recent years.Monetary policy may contribute to rising heterogeneity, but it is not the main driver.Structural headwinds are holding back growth in some countries more than others.Signs of softening labor demand and progress in disinflation suggest inflation could sustainably fall back to the 2% target.Elevated services inflation and strong wage growth persist.Monetary policy alone cannot resolve structural issues.European governments must turn current challenges into opportunities.Europe has previously demonstrated its ability to adjust and rebound from adversity.Escaping stagnation requires action at both national and European levels.Focus on innovation, entrepreneurship, competition, and business dynamism is needed.Strengthening the Single Market, improving access to private equity, and reducing bureaucracy are critical.The green transition should be leveraged to advance innovation and regain price competitiveness.Policies must incentivize labor participation and preserve a skilled workforce through immigration and education.These efforts will strengthen the euro area.

This article was written by Greg Michalowski at www.forexlive.com.