The ECB is ready to launch new monetary stimuli and does not rule out a further cut in interest rates in order to support the European economies affected by the Covid-19 pandemic. The president said so Christine Lagarde in an interview released during the CEO Summit of Wall Street Journal. Words that have not gone unnoticed on the markets. The Stock Exchanges, after a sluggish morning, are slowly finding more conviction with Milano (+0,54%) to lead the way led by Pirelli (+ 4,31%), Unicredit (+ 3,18%), Leonardo (+ 3,16%) and Bper (+2,15% after yesterday's debacle). Positive too Madrid (+0,8%), while Frankfurt, after a morning down, it finds parity again. Paris + 0,2%.
Returning to Lagarde's words, the number one of the European Central Bank warned of the repercussions that the second wave of infections in Europe could have on the recovery. Eurozone GDP, Lagarde explained, will not return to pre-Covid levels before 2022.
In the monetary union the recovery remains “incomplete, uncertain and uneven”, said Lagarde, explaining that now “we see that after a period of lockdown that has been quite successful in reducing infections, but has hit the economy hard, there has been a rebound”. Looking at the picture “with economic lenses”, you underlined “if we had a late spring-early summer recovery, now we fear that the new containment measures will have an impact on this recovery. We fear there may be a second arm of the V." The reference is to what economists call a "V-shaped recovery", characterized by a sharp decline followed by a rapid recovery. The scenario feared today by Lagarde is instead that of a recovery to the W.
A hypothesis that the central banks will have to take into account, continuing to support the systems with monetary stimuli, in order to help the Governments, which are active with their fiscal policies. “We are prepared to use all the tools we have at our disposal and that they are able to produce effective and efficient results”, reassured Lagarde. As regards rates, the ECB has chosen not to prepare further cuts for this year, opting for a three trillion dollar stimulus package, including large-scale bond purchases, low-interest loans to banks. The number one of the ECB, answering questions from the American economic newspaper, however, he did not rule out further cuts– On the other hand, he specified, for now the central bank is considering other more effective intervention tools than further rate cuts.
