MILAN (Reuters) -The European Central Bank will keep doing all that is necessary to complete its nearly accomplished mission on inflation, one of its top policymakers, Bundesbank President Joachim Nagel, said on Thursday.
Data this week showed euro zone inflation fell to an annual 1.9% in May from 2.2% in April, and fellow policymaker Fabio Panetta on Wednesday pointed to projections indicating it would undershoot the ECB's 2% target for an extended period of time.
The ECB has signalled a pause in policy easing this month despite the dampening effect on price growth of the strong euro and low oil prices.
Bank of France Governor Francois Villeroy de Galhau on Thursday said that if the ECB decided to move on interest rates in the next six months, it would most likely cut them.
Vice President Luis de Guindos was more cautious, saying the ECB would retain a flexible approach in the face of risks from Washington's trade policy and geopolitics, echoing a message delivered the previous day by Panetta, who leads Italy's central bank.
Milan's annual Young Factor conference on financial literacy this week gathered students from all over Europe to meet with a host of central bankers and bank CEOs.
De Guindos said growing uncertainty held back investments and could damage job creation. Under this backdrop, the ECB would stick to a "meeting-by-meeting, data dependent" approach to monetary policy decisions.
Nagel, however, stressed that bringing euro zone inflation to target was the best thing the ECB could do to promote economic growth.
With price stability as its sole mandate, the ECB can only provide a stable base, laying the ground for politicians to do the rest.
"I guess this year we are coming close to our target, 2% on average, that is more or less mission accomplished," the German central banker said, adding that the ECB has been shown to be good at using a wide range of tools to achieve price stability.
"We are now in the neutral territory of monetary policy," he said. "So I believe that we are on the right track when it comes to monetary policy... We will do what is necessary, we did it in the past."
On Wednesday, Bank of Portugal Governor Mario Centeno warned that weak economic growth in the euro zone could prevent inflation from hitting the ECB's target.
(Reporting by Valentina Za, editing by Alvise Armellini and Toby Chopra)
By Valentina Za
