Lagarde Sees Summer Recovery at ECB, Tricky Post-Pandemic Stage

Photographer: Geert Vanden Wijngaert / Bloomberg

European Central Bank President Christine Lagarde expected the recovery of the eurozone in the summer, reaffirming that public authorities will work hard to dismantle the economy from emergency aid.

In an interview with the French newspaper Le Journal du Dimanche, Lagarde expressed confidence in the region’s ability to emerge from a stronger coronavirus crisis, with a more digital and greener future. She urged governments to speed up work on their spending plans, so that the European Commission can start issuing joint debt.

“We remain confident that 2021 will be a year of recovery,” she said. “Economic recovery has been delayed, but not removed. It’s clear that people are waiting carefully for it. ”

The ECB is currently predicting an economic expansion of almost 4% this year, following a shortfall of almost 7% in 2020, and Lagarde said that is still likely if support does not end too soon – although which is largely dependent on the distribution of vaccines.

The EU vaccination program has been slow to date, with only 3.6% of the population receiving a dose. The UK has delivered more than 17 beats per 100 people, and the US has nearly 12.

Relapsing diseases have forced many eurozone countries to lock up renewed locks, causing an economic downturn in the fourth quarter and making a double-dip recession inevitable.

Yield runs at around 12 billion euros ($ 14 billion) per week below pre-pandemic levels, and a botched start to vaccines means restrictions will only be lifted gradually. That makes the revenues of the European Union’s recovery funds more critical.

Lagarde described the ECB’s 1.85 trillion-euro emergency bond purchase program as “appropriate” in size and “reasonable” in length, and promising policymakers will “work as long as the pandemic causes a situation crisis in the euro area. ”

But she also warned that “once the disease is over and the economic crisis is immediately behind us, we will have a difficult situation with our hands. ”

We must “not repeat the mistakes of the past by cutting off fiscal and monetary stimuli at the same time,” she said. Instead, authorities need to offer flexible support that is gradually diminishing.

“Economies then need to learn how to work again without the help of one of the specific measures that need to be introduced as a result of the crisis,” she said. “I’m not worried about this, because the ability to recover is strong.”

When asked about the possible future of Mario Draghi as Prime Minister of Italy, she said the country and the continent are “lucky” to have accepted the challenge.

“It has the necessary qualities,” she said. “It has the knowledge, courage and humility needed to carry out its new function, ie to restart the Italian economy with the help of Europe.”