Exclusive: Christine Lagarde says countries must not ‘brutally’ pull stimulus
The chairman of the European Central Bank told CNN Business ‘Richard Quest’ on Thursday that his biggest fear is not that the European Union will accumulate a mountain of debt, but that the government will guarantee job guarantees and income in the right way ahead of time May withdraw support.
Such programs, she said, should be “gradual” and comfortable with care.
“This is the moment that I think is the hardest, the most subtle, and where the decision will have to be applied,” Lagarde said in the interview, which will air on CNN International’s “Quest Means Business” show at 3:00 pm ET . .
Governments received trillions of dollars of assistance over the past year to mitigate economic losses to combat the Kovid-19 epidemic, adding unprecedented support from central banks such as the ECB. European leaders also approved a € 1.8 trillion ($ 2.2 trillion) recovery package and budget Helping strengthen the block’s economies after going through a crisis.
But Lagarde stressed that as the economy improves and recovery accelerates, politicians should not withdraw support prematurely.
The ECB, she said, “is for a long time.”
In its most recent forecast released in December, the central bank predicted that Europe’s economy would expand by 3.9% in 2021, with output reaching pre-epidemic levels by mid-2022.
Legarde said such a forecast hinges in large part on the vaccine rollout, which got off to a slow start in the European Union.
“We have vaccines – over the week, which is good. They are being manufactured, they are being distributed,” Lagarde said. “But people have not been vaccinated yet. So it will take some time until we have this herd immunity, which is not dissimilar to us, because it is not satisfactory to us.”
Other key, Legard said, the implementation of relief programs will be. While the EU’s fiscal rules have been relaxed, wealthy member states are handing over money and Brussels is borrowing on behalf of struggling countries such as Italy and Spain, “the money needs to roll in the course of Britain” ”
“We are deciding to borrow this extraordinary step of Europeans completely together,” Lagarde said. “But it is now a question of salvation.”