“That being the case it justifies fully what the president (Mario Draghi) said at the end of his speech (on Tuesday) that we need persistence. If we want to bring inflation to our target of below but close to 2 (percent) then we have to persist in the type of monetary policy that we been adopting,” he added.

Turning to Monday’s controversial use of state aid in the rescue of two Italian banks, Constancio denied that the situation represented any of the parties involved receiving beneficial treatment which flouted existing European Union (EU) rules.

The ECB vice president argued that the case – which saw the Italian state place itself on the hook for up to €17 billion of liabilities concerning the two failing Venetian banks and larger peer Intesa San Paolo taking on the ‘good’ assets with support and guarantees from the government – had been decided in accordance with the bloc’s rules on state aid and bank resolutions.

He proposed that the final solution resembled a ‘precautionary recapitalization’ situation in which state aid is allowed, according to the ECB’s banking supervision laws ‘when this is necessary to remedy a serious disturbance in the economy of a Member State and preserve financial stability.’

“It’s not much difference from a situation of precautionary recap which is foreseen in the law, it’s not an exception, not a special privilege,” Constancio contended.