The European Central Bank (ECB) estimates that the asset purchases it has made this year in response to the pandemic will raise the eurozone-as a whole gross domestic product (GDP) by 1.3 points, as well as “saving” one million jobs.
This was explained by the president of the issuing institute, Christine Lagarde,in an interview with the French newspaper Le Monde,whose transcript the ECB broadcast on Monday.
“We estimate that growth will be 1.3 points higher overall, and that inflation will be 0.8 points higher. According to the ECB’s assessment, we have saved one million jobs in the euro area. We have acted and our actions have been effective,” said the former French minister.
Lagarde insisted that the ECB has not run out of ammunition. “If more needs to be done, we will do more,” he added, adding that it is “essential” that government-deployed safety nets are kept going during the crisis and not withdrawn “too soon.”
With regard to the second wave of the pandemic, the ECB president explained that it is affecting the recovery. “Since the uptick we saw in the summer, the recovery has been uneven, uncertain and incomplete, and now it risks losing momentum,” he said. If the situation continues to deteriorate, Lagarde has indicated that the ECB will revise its December macroeconomic outlook down.
On the other hand, the President has ensured that “rapid progress” is needed on the political side with regard to the steps needed to implement the European recovery plan.
“If [the recovery plan] is not well directed, if it is lost in an administrative labyrinth and does not help the real economy to reorient our countries to be more digital and green, we will have missed a historic opportunity for real change,” Lagarde said.
In addition, asked about the reluctance of States such as the Netherlands on the recovery plan, the ECB president has assured that it takes many governments “time to realize that a collective response is the right answer to a common ‘shock'”.
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