Greek ECB Governing Council member Yannis Stournaras warned that the US reciprocal tariffs were “worse than expected” and a source of “unprecedented” global policy uncertainty.

In an interview with the Financial Times, he characterized the tariffs as “definitely a deflationary measure” for the Eurozone.

“A notable adverse impact on growth could lead to activity being much weaker than expected, dragging inflation below our targets,” he added.

While conceding it’s difficult to quantify the exact fallout, Stournaras projected a potential hit of between 0.5 to 1 percentage points to Eurozone growth.

He refrained from speculating on whether the threat justifies a 50bps rate cut but underscored the seriousness of the downside risks.

ECB’s March 5-6 meeting accounts revealed a heated debate among Governing Council members over both the 25bps rate cut decision and the tone of accompanying communications.

With considerable uncertainty clouding the outlook—ranging from global trade policy to persistent services inflation—many policymakers urged caution, particularly in avoiding language that could be construed as forward guidance. The balance of risks, especially from tariff escalations and uneven disinflation, made it clear that any commitment to further cuts would be premature.

A few members were only willing to support the March rate cut on the condition that the policy statement “avoided any indication of future cuts or of the future direction of trave”.

This led to a debate on whether to remove the phrase “monetary policy remains restrictive”. In the end, Chief Economist Philip Lane’s proposed compromise—“monetary policy is becoming meaningfully less restrictive”—was broadly accepted.

This phrasing was viewed as neutral enough to reflect the evolving inflation outlook without implying a preset path.

Crucially, the ECB emphasized that the revised language should not signal the outcome of April’s meeting. “Both a cut and a pause” are “on the table, depending on the incoming data.

Full ECB accounts here.

Bundesbank President Joachim Nagel issued a strong warning today, saying the US administration’s new tariff measures “endanger global economic stability.”

Nagel emphasized the need for strong alliances and fewer trade barriers to tackle today’s global challenges, adding that the US is pursuing a “completely different direction” with economic policies that could leave many losers—especially within its own borders.

Echoing these concerns, Greek ECB Governing Council member Yannis Stournaras said the US tariffs are expected to weigh on Eurozone GDP growth rate by 0.3% to 0.4% in the first year, though he noted that the broader inflation outlook remains unaffected.

Stournaras added that the US tariffs were “not an obstacle” to an ECB rate cut in April.