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The
ECB agreed at an emergency meeting last week to create a new
tool to contain divergence in borrowing costs, after yields rose
on government bonds issued by indebted countries in the bloc's
south, widening their differential with low-risk Germany.
Centeno said the new instrument will "fight the risks of
fragmentation" as monetary policy is gradually normalised, but
that "there is no single typology of indicators to measure the
materialization of fragmentation".
"There is no goal regarding specific yield spread values," he
told reporters.
Centeno said the risks of fragmentation had to be dealt with "in
their genesis and not afterwards" and that the instrument "will
certainly demonstrate the determination of the euro system and
the council of governors in containing these risks".
The spread between 10-year Portuguese bonds and German Bunds,
hit more than 140 basis points before the ECB's announcement
last week but had shrunk to around 108 basis points on Friday.
In January 2012, at the height of the euro zone debt crisis,
Portugal's 10-year yield reached around 18% and its spread
against Bunds soared to over 1,500 basis points.
The ECB plans to raise interest rates by 25 basis points in
July, its first increase in over a decade, and again in
September, when the rise could be larger if inflationary
pressures do not ease.
Euro zone inflation hit a record-high 8.1% last month.
Centeno said inflation in Europe has an important component
imported from the United States, "where the inflationary
phenomenon happened earlier".
"The U.S. economy recovered pre-pandemic demand levels in the
summer of 2021, in Europe this has not yet happened," he said,
citing "wage pressures, which are not felt in Europe".
(Reporting by Sergio Goncalves, editing by Andrei Khalip and
Catherine Evans)
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