ECB Vice President Luis de Guindos said he didn’t foresee Eurozone entering into recession. However, low growth could extend for a longer time. Meanwhile, latest news regarding US-China trade negotiations were positive. De Guindos also warned that low profitability of banks would lead to low valuation, “making the inevitable consolidation of the sector very difficult.” Low profitability of Eurozone banks was also related to costly structures and excess capacity.
Separately over the weekend, ECB policymaker Robert Holzmann complained that the current ECB monetary policy is “wrong” and “a different policy is needed in the future”. He added that ECB should think about lowering inflation target, temporarily, from 2% to 1.5%. Also, “I am convinced that she has heard the dissenting voices, that she will take them seriously and will try to find a new approach here.”