ECB's Escriva sees scope for minor monetary policy easing
Last week, the ECB cut interest rates and hinted at a pause after inflation in the euro zone returned to its 2% target.
Escriva, who is also Bank of Spain Governor, said in an interview to newspaper El Pais on Sunday that he "was very comfortable" with the current, gradual approach of successive 25-basis-point rate cuts.
"Our central scenario – GDP growth of around 1%, inflation of 2% – could require some fine-tuning if it is confirmed," Escriva.
The ECB has cut rates 2 percentage points since last June, to prop up a euro zone economy also hit by erratic U.S. economic and trade policies.
Escriva said confidence in the dollar and U.S. assets had decreased since U.S. President Donald Trump took office and that since April, the dollar had not been a "safe haven" and its dominance as a global reserve currency appeared to have peaked.
He also said the Bank of Spain was expected to revise downwards on Tuesday the forecast for Spanish economic growth by a few decimal points from the current 2.7% for 2025.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
12 hours ago
- The National
Europe faces $1 trillion military bill to match US might on continent
President Donald Trump is offering security guarantees for Ukraine and the wider European region as part of a peace process, which prompts the question: what is the US military's role on the continent worth? Removing American might from the European equation raises queries over how much dozens of countries can invest to match the level of military readiness on offer today. The cost for Europe 's defence in the event of a US military withdrawal following a Ukraine peace deal would be $1 trillion, according to a think tank. That estimated total cost above $1 trillion would stem from the boosting of defence spending back to Cold War levels in terms of individual nations' GDP. The IISS estimate covers both one-off procurement outlays of almost $400 billion as well as support and associated costs over a 25-year assumed lifespan. The additional purchases would be triggered as a first step during a 'window of vulnerability' in which a dramatic increase in defence spending would be needed just to stand still. This means building 600 tanks and 10 nuclear submarines and adding 400 fighter jets, the International Institute for Strategic Studies (IISS) said. That would need to be done at speed to meet a resurgent Russian threat, with the likelihood that Moscow would have reconstituted its forces by 2027. Russia's economy is already on a war footing, so it has the ability to produce 2,700 attack drones a month, and has an army that is experienced in modern warfare. Europe's Nato states have promised to increase their defence budgets from 2 per cent to 3 per cent of GDP. The bill would suddenly go much higher if the US started to withdraw 128,000 service personnel and their kit to concentrate on the Indo-Pacific region. As US Vice President JD Vance has said, Europe must 'step up in a big way to provide for its own defence'. This will require the continent's powers to 'reduce dependencies on the US and, in extremis, to prepare for a Nato without any US role', the IISS report stated. Fighter jets The most expensive single item would be the purchase of 400 tactical combat aircraft, and training the pilots to fly them. But having many more squadrons of F-35 stealth fighters, Eurofighters and F-16s would give Europe a significant edge over Russia's depleted air force. This new air armada would cost up to $64 billion but Europe would also need other aircraft currently supplied by the US, including 15 P-8 Poseidon submarine hunters ($4.8 billion) and 200 attack helicopters, such as the Apache ($12 billion). It would at the very least need a further 50 Reaper combat drones ($3 billion), given the game-changing impact of drones in the Ukraine-Russia war. All its aircraft would need missiles, from Meteor air-to-air weapons to Storm Shadow cruise missiles, with a further 7,000 required at a high end cost of $16 billion. Tanks and missiles With drones making armoured warfare a much trickier undertaking, the 600 extra main battle tanks ($18 billion) required, such as the US-made Abrams or German Leopard 2, would also need to be more resilient. Infantry fighting vehicles, which have proven their worth in Ukraine by protecting troops and providing firepower, would be a priority. A further 2,400 of all types would be necessary, costing $25 billion. Given the importance of artillery, far more will be required, with at least 100 guns ($2.2 billion) and many more short or medium-range missiles such at the US-supplied Atacms, which have proven effective in Ukraine. A total of 400 Atacms would be needed, as well as 27 extra air-defence batteries, such as the Patriot ($35 billion), which have been vital in defending Ukraine's civilians and infrastructure. Essentially, on land the continent would need an additional three armoured divisions to cover the US absence. Warships and subs A war at sea will require significant European upgrades to combat Moscow's powerful Northern Fleet in the North Sea and Baltic Sea. An additional 10 nuclear submarines ($22 billion), such as the British-made Astute class, would be required, even though they take a decade to build, along with a destroyer force of 20 extra ships ($50 billion). A further four aircraft carriers would be necessary at a cost of $13.6 billion. These will all need more missiles, from cruise to air defence and torpedoes totalling $25 billion, according to the IISS estimate. Arms budgets Given that much of the above will take years to assemble, alongside willingness among European powers to finance it, the continent would face a 'considerable window of vulnerability' without US support, the report said. Therefore, it might not have 'much time to prepare for a Russian threat to allied territory' and would face 'a wide range of capability gaps'. Europe would face stark choices on how to fill them, especially with aircraft production at global aerospace factories already at high capacity. In the short term this would be 'very challenging', but given a few more years it 'would not be an impossible task', the authors suggested.
Zawya
13 hours ago
- Zawya
India suspends cotton import duty in signal to US, relief for garment industry
India has suspended an 11% import duty on cotton until September 30, in a move seen as a signal to Washington that New Delhi is willing to address U.S. concerns on agricultural tariffs, while also easing pressure on its garment industry. The temporary suspension, announced late on Monday, could benefit U.S. cotton growers and provide relief to India's apparel sector, which faces tariffs of nearly 60% on shipments to the United States from later this month. A planned visit by U.S. trade negotiators to New Delhi from August 25-29 has been called off, delaying talks on a proposed bilateral trade agreement and dashing hopes of relief from an additional 25% U.S. tariff on Indian goods from August 27. President Donald Trump earlier this month announced an extra tariff on Indian goods as punishment for New Delhi's purchases of Russian oil, doubling the total duty to 50% on U.S. imports of Indian goods from later this month. Indian exports had previously faced levies of 0-5%, with duties on some textiles ranging between 9% and 13% before Trump raised tariffs in April. The United States is the biggest market for India's garment exporters, who say steep tariffs are leading to order cancellations and making them uncompetitive against Bangladesh and Vietnam, which have U.S. duties of 20%, and China at 30%. India's labour-intensive sectors, including textiles, footwear, engineering goods and shrimp, have been jolted by U.S. tariffs, and are now seeking alternative markets. "The largest beneficiary of the duty free import will be the U.S., the second largest supplier to India," said Ajay Srivastava, founder of Global Trade Research Initiative, a New Delhi-based think tank, adding India already allows duty-free cotton imports from Australia within a quota. Cotton imports more than doubled to $1.2 billion in the 2024/25 fiscal year to March, from $579 million a year earlier, led by $258 million from Australia, $234 million from the United States, $181 million from Brazil and $116 million from Egypt, Srivastava said. The sharp rise in U.S. tariffs comes just as India was emerging as a stronger alternative for American garment buyers, with Bangladesh facing political uncertainty and companies seeking to diversify supply chains beyond China. Industry bodies such as the Confederation of Indian Textile Industry (CITI) had urged the government to scrap the cotton import duty to help make the sector more competitive. Reuters earlier reported that some Indian exporters were scrambling to explore manufacturing options overseas to offset the impact of the higher tariffs. India's garment sector was already grappling with a labour crunch and limited production capacity. The prospect of exporters relocating production abroad poses a further challenge to the government's "Make in India" manufacturing drive. Industry officials now expect the government to extend duty-free cotton imports beyond September.
The National
13 hours ago
- The National
India needs to find its own ‘Trump whisperers' to deal with the US tariff threat
The threat of up to 50 per cent US tariffs on goods from India, which emerged from the White House over the past month, struck many as a bolt seemingly out of the blue. Indian Prime Minister Narendra Modi had had a good visit to Washington in February, and a detailed trade deal between Washington and New Delhi seemed all set for approval at the end of this month. While India will probably avoid the worst-case outcome, the level of surprise indicates that New Delhi lacks high-level advocates in Washington with the inside track. As a result, it is still struggling to grasp how US President Donald Trump makes decisions, or how he views both trade and the Indo-US equation. Until those inter-linked problems are sorted out, bilateral relations will continue to bounce between the highs of periodic direct contact by the two national leaders, and regular lows in between. India's diplomatic and business communities continue to wonder how things went so wrong between the two governments in recent months. The answer to this question lies in New Delhi's struggle to adapt to Mr Trump's commercial (rather than diplomatic) approach to dealmaking. The tariff threats to India come from two directions: the Russia-Ukraine war and the emergence of competition – as opposed to co-operation – between major trading powers facing the threat of tariffs from Washington. The war in Ukraine is the more volatile of the two factors, with the Trump administration's policy veering from Moscow's point of view, then to that of Kyiv and Brussels, and now back to Moscow's following the US-Russia summit in Alaska last Friday. This latest swing is good news for New Delhi, as the threat of secondary sanctions for buying Russian oil is likely to recede at least temporarily. But even if (or more likely when) the pendulum swings again, it is unlikely that the US will be maximalist in its demands. Any rapid and major change in Indian oil purchases would put strains on global oil supply and send prices shooting up for American voters, something that no administration wants to see. The battle between the EU and UK on the one hand, and Russia on the other, to influence Mr Trump on the war in Ukraine also provides an essential window into the challenges of diplomacy with the administration. Much has been made in commentary about the importance of top-level chemistry, and the natural advantage of strong leaders such as Russian President Vladimir Putin winning Mr Trump's respect and agreement. However, Russia's example goes to show why this just isn't enough. Mr Putin's ability to effectively communicate Russia's perspective is extremely powerful. But the lack of any other interlocutors who can engage with Mr Trump as persuasively means that Moscow struggles to build momentum. In contrast, the EU and UK have found a range of 'Trump whisperers', people below the head-of-state level who understand the US President. It is these contacts who have managed to stay appraised of Mr Trump's ever-shifting priorities and perspectives and convince him of the relevance of their positions to those priorities. Until India can find its own Trump whisperers, the positive, can-do Trump-Modi personal equation will not be enough to keep the bilateral relationship on the rails. The other half of the tariff threat is closely tied to this problem. Mr Modi's productive meeting with Mr Trump in February gave India's notoriously tough negotiators a sense of what it would take to craft an agreement that would satisfy both sides. But one of the Trump administration's greatest successes is that it has created competition rather than co-operation between countries facing the threat of US tariffs. Over the course of the summer, the larger trade partners of the US – led by the EU and UK – showed a new willingness to cross their own previous red lines to make deals with Washington. Mr Trump seems to regard it as axiomatic that these developments shifted the baseline of expectations for all others who followed. In this view, it would be up to India (currently only the US's 10th-largest trade partner) to try to improve its offer and match the depth of concessions granted by the larger US trade partners. Despite all this, India and the EU find themselves in a similar boat. The Trump administration does not view either entity to be dominant security actors in their regions (unlike say China, Russia or Israel). This magnifies his annoyance when they offer a narrative that contradicts his own – for example, the EU's constant reminders that Russia is the aggressor in the Ukraine war, or New Delhi's rejection of Mr Trump's claim that he mediated the end of the recent hostilities between itself and Pakistan earlier this year. Similarly, the US President's anger with European and Indian trade surpluses with Washington is complemented by a lack of fear over their economic advantage. In contrast, Mexico, China and Canada have greater political leverage than the EU or India that goes beyond the sheer volume of trade with the US. These exporters supply daily goods from food to energy and mid-to-low-range cars and phones that have a critical direct impact on the everyday lives of average American voters. Any trade war brings serious political costs for the Trump administration. Indian exports, on the other hand, range from engineering goods to gems and jewellery that do not carry the same risks. Neither do luxury European goods, whether cheese, wine or limousines. The one exception is India's supply of generic medications, which have become a cornerstone of American health care; a canny Mr Trump may extend a temporary waiver to generate pressure while avoiding backlash. In short, the strength of India's hand in dealing with the Trump administration is fundamentally different than it looked at the start of the US President's second term, when the new rules of the power game were just beginning to emerge. But on the other hand, the European experience suggests that even a so-so hand can be played to great advantage once those new power rules have been understood and applied.
