Pablo Hernández de Cos, an ECB Governing Council member and candidate for ECB
president, said policymakers should stay alert to inflation risks from elevated
energy prices. He said second-round effects have not emerged so far but noted
hopes for a quick end to the Iran war — and a resulting fall in energy prices —
have not materialized, so vigilance is necessary. He declined to comment on his
candidacy. Hernández de Cos also warned that high public debt in some economies,
coupled with persistent deficits, is a vulnerability if borrowing costs rise
further, since higher rates would increase debt-servicing costs.
