More from the Schnabel interview: - Q: What.....>

ECB: More from the Schnabel interview:

- Q: What is your biggest fear for the future? Is it deflation?

- A: In the short run, there are quite a few disinflationary forces. Falling

energy prices have already depressed inflation a lot. The medium-term inflation

outlook will likely also be challenging but is much more uncertain because there

are countervailing forces. On the one hand, there are downward pressures coming

from the consumption and investment side related the lockdown and to

uncertainty. On the other hand, de-globalisation may have the opposite effect,

and supply-side disruptions may put upward pressure on prices. But my main

concern is disintegration, which would be very harmful. Europe needs to continue

on the path of economic and financial integration and make progress towards

completion of the banking and capital markets union. A safe European asset would

certainly help integration and would also foster the international role of the

euro. These are the main things we should focus on and we should not allow the

European economy to disintegrate in any way.