ECB’s main issue is how quickly stimulus can be reduced: Hansson

FILE PHOTO: The European Central Bank (ECB) headquarters in Frankfurt

TALLINN (Reuters) – The outlook for the euro zone economy has improved so the question now is how quickly central bank support can be reduced without jeopardizing growth, European Central Bank policymaker Ardo Hansson told an Estonian newspaper.

“The geopolitical risks have not yet disappeared. We are talking about the base scenario, which has definitely improved, but the risk is not gone.” Hansson was quoted as saying in Estonian daily Postimees on Tuesday.

“Now the question is how quickly can the central banks’ offered support for the economy be reduced so that a positive economic trajectory is maintained,” Hansson, Estonia’s central bank chief added.

The European Central Bank rate-setting Governing Council will next meet on June 8 and markets expect only an incremental change in the bank’s policy message.

“We all think about how and when to begin to implement the transition (out of stimulus) and how to communicate it. This must be done very carefully,” Hansson said.

(Reporting by David Mardiste; Editing by Balazs Koranyi)