FRANKFURT, May 19 (Reuters) - The European Central Bank cannot risk running “the economy hot” to support employment once inflation stabilises at its target of almost 2 percent, ECB Executive Board member Benoit Coeure said on Friday.
“Should we reach a point where the path of inflation is expected to be self-sustaining, but long-term unemployment remains high, there should be no doubt as to how I would decide regarding our policy stance,” Coeure said in Geneva.
“Monetary policy cannot ‘run the economy hot’ as insurance against labour market risks.”
He also added that so far there is no evidence that a prolonged period of high unemployment has increased structural unemployment in the euro zone. (Reporting By Francesco Canepa; Editing by Balazs Koranyi)