In an interview with El País, Bank of Spain Governor José Luis Escrivá set out his view that the European Central Bank should keep decisions data-dependent and avoid pre-committing to a future interest rate path, while being open to further 25 basis point cuts as inflation stays near the 2% medium-term objective. He also said the Bank of Spain will trim its GDP growth forecast for Spain for 2025 by a few tenths from the 2.7% published in March, and described a five-year internal transformation plan that strengthens the Directorate General Economics, including 35 new positions. The outlook was framed as increasingly uncertain, with possible short-term downside risks to inflation from weaker demand, lower energy prices, a stronger euro and tariffs weighing on external demand, offset by potential medium-term upside pressures from disrupted global trade and higher defence and infrastructure spending. On the international monetary system, he argued that confidence in the US dollar and US assets has weakened since April and that the dollar’s dominance as a reserve currency may be approaching a ceiling, creating scope for the euro if Europe reduces capital market fragmentation and adopts a clear timetable with binding commitments for a genuine capital markets union. He also pointed to continued segmentation in European banking and the lack of a European deposit guarantee fund as barriers to cross-border bank mergers, and rejected claims of institutional instability at the Bank of Spain, citing internal surveys that showed staff motivation on systems, processes and career opportunities had fallen to around 40% and noting that the pensions chapter of the annual report was simplified after the Independent Authority for Fiscal Responsibility (AIReF) published its mandated assessment. The revised economic projections are scheduled for release on 10 June 2025, while the transformation programme is intended to run over a five-year horizon.

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