At the ECB Forum in Sintra, Portugal, Bundesbank President Joachim Nagel spoke with CNBC’s Annette Weisbach and Bloomberg’s Francine Lacqua about the challenges facing the euro area economy and the outlook for monetary policy. In the interviews, he said that inflation for this year will probably stay significantly above the target, with energy prices still affected by ongoing geopolitical tensions. 

In the discussion with CNBC he noted that the situation remains “opaque” and that it is too early to give an estimate of when inflation will return to target levels. “Monetary policy has to remain vigilant, Nagel said, highlighting the need for caution and data-driven decisions.

On economic growth, Nagel acknowledged that Europe is behind and stressed the importance of strengthening capital markets and implementing structural reforms. He welcomed recent steps to improve Germany’s pension system: “This was good news for Germany and it’s an important step forward for strengthening the capital market and the capital markets in Europe, Nagel said.

In the interview with Bloomberg he additionally spoke about the reform of the pension system through a public fund. He said that the Bundesbank was well positioned to oversee this task: We have the knowledge, we have the expertise, and so we are applying for this job. Nagel emphasised that the crowding in of private capital was important.

Nagel: I hope that we will see more progress in the peace efforts and this is giving certainty to the economy.

In the interviews, Nagel also addressed the impact of disruptive technologies like AI, expressing optimism about German industry’s ability to adapt and innovate.

He additionally underscored the importance of stable public finances and geopolitical stability for supporting investment and economic certainty: “I hope that we will see more progress in the peace efforts and this is giving certainty to the economy, Nagel told CNBC. 

As the ECB prepares for its next policy meetings he emphasised: “We have to wait until we have all the information necessary to come to a conclusion. We will keep all the options open.”

In the interviews, Nagel also welcomed the participation of the new Chair of the Federal Reserve, Kevin Warsh: “Everyone is appreciating that he’s following the tradition that Fed colleagues are coming to this place, so he’s very welcome.