The ECB plans to maintain supportive monetary policy, Ms Lagarde tells MEPs

(Credit: Unsplash)

This article is brought to you in association with the European Parliament.


The Economic and Monetary Affairs Committee quizzed the ECB President about economic stimulus stemming from negative interest rates and plans for the pandemic emergency purchase programme.

During the monetary dialogue on Monday evening, the ECB’s President Christine Lagarde assured ECON MEPs that, while the EU’s economic outlook is improving, the ECB will continue the pandemic emergency purchase programme to preserve favourable financing conditions in order to support economic recovery. The economy will continue to be financed during the crisis, she said.

Apart from keeping favourable lending conditions in order to support the EU economy while it emerges from the pandemic, MEPs were concerned about the potential side effects of continuous negative interest rates such as housing market bubbles.

Ms Lagarde stated that low interest rates result in increased lending to companies and help the EU economy to recover. They have potential side effects that have to be watched closely, she added, but currently the benefits outweigh the costs.

MEPs asked about inflation and spill over effects from rising inflation in the US. Risk from US inflation, fiscal boost and stimulus to the US economy will have an impact on the EU GDP and inflation, the President said, but she insisted that the situation in the EU and the US is different because of economic cycles, inflation and inflation expectations.

Although rising inflation rates are temporary and transitory, stemming from temporary factors such as rising energy prices, we will monitor them carefully as well as inflation expectations, Ms Lagarde assured MEPs.

Finally, MEPs asked about the ongoing strategy review, the outcomes of which will be made public after formal decisions have been taken and the state of play on the digital euro. The design of the digital euro will be discussed on 14 July by the ECB governing council with a view to finding a solution for the shrinking use of cash and facilitating access to it for people without bank accounts. On the other hand, the digital euro should become an attractive means of payment and not a way to invest. It should safeguard financial stability, protect privacy and stay under the ECB’s control, as the bank is not interested in exploiting personal data.

During the following discussion with Paschal Donohoe, President of the Eurogroup, MEPs focused on short and medium term actions in order to transform the economic rebound into long-lasting recovery. Additionally, the Eurogroup will now work to build a consensus on the fiscal rules reform, Mr Donohoe assured MEPs.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

How COVID-19 could open the door for driverless deliveries

4 steps to developing responsible AI

Capital markets selloff: The financial moguls send messages to monetary authorities

5 crises that could worsen under COVID-19

CEOs as activists: should leaders speak up about social causes?

Refugee crisis update: Commission is struggling alone with little help from EU or G7 leaders

Thursday’s Daily Brief: Albinism, displacement in Central America, family-friendly nations, updates on the Gulf and Darfur

This city is planting a tree for every man, woman and child

Belgium: keep up reforms to increase employment and productivity growth

COVID-19 : Have we learnt any lessons at all from last year?

Our poisonous air is harming our children’s brains

UN human rights chief fears world has grown numb to Syrian carnage

The European Green Deal must be at the heart of the COVID-19 recovery

EU and 15 World Trade Organization members establish contingency appeal arrangement for trade disputes

Mental health in times of a pandemic: what can each individual do to lessen the burden?

China revisited by the former Ambassador of Hungary to China

Coronavirus: Team Europe continues to deliver with more than €26 billion disbursed in support to partner countries in one year

Thousands returning to Nigeria’s restive Borno state ‘at risk’; UN ‘gravely concerned’

Russia and the West use the same tactics to dismember Ukraine

OECD Secretary-General Gurría welcomes announcement of new trade agreement between the US, Mexico and Canada

Iraq: Solutions needed ‘urgently’ to quell ongoing violence, break political deadlock

Brexit: No deal without marginalizing the hard Tory Eurosceptic MPs

Latin America’s cities are ready to take off. But their infrastructure is failing them

‘Bleakest period yet’ in Occupied Palestinian Territory: UN human rights expert

EU: All economic indicators in free fall

How do we upskill a billion people by 2030? Leadership and collaboration will be key

5 things you probably didn’t know about global health

A fairer world requires fairer tech. Here’s why

The world’s coastal cities are going under. Here’s how some are fighting back

The power of digital tools to transform mental healthcare

How has technology changed – and changed us – in the past 20 years?

The European Commission cuts roaming charges. But “it’s not enough”…

What have the banks done to the markets making them unable to bear cheap oil?

These 3 tech visionaries are reinventing the wheelchair

7 ways to break the fast fashion habit – and save the planet

Environmental liability rules need revamping

Fall asleep in Vienna, wake up in Paris – Europe’s night trains make a comeback

Human rights champions from across the world receive top UN prize

Young people worldwide can ‘determine the future of migration,’ says UN senior official

From violence to dialogue: as land conflicts intensify, UN boosts efforts to resolve disputes through mediation

How data is transforming the way we care for the ocean

European Fund for Transition to support more workers made redundant

The European Council takes more measures to stem illegal migration

Commission initiates an investigation to decide whether to prolong the steel safeguard measure

What’s the difference between carbon negative and carbon neutral?

Multilateralism’s ‘proven record of service’ is focus of first-ever International Day

Illness in health workers: when the caregiver becomes the patient

Ocean Conference has potential to be a ‘global game-changer’

An entrepreneurial point-of view on tackling the migration crisis and the risks of abolishing Schengen

Victims’ Rights: New Strategy to empower victims

Why the global trade of chemicals is key to COVID-19 recovery

An electric motorbike could help tackle big game poaching. Here’s how

Changing world of work needs new jobs strategy

Same-sex marriages and partnerships should be recognised across the EU

Poliomielitis: climatic changes and impossibility in border control

Working with millennials, leaders say humility works better than bossing around

To take or not to take – The Indian vaccination dilemma

Coronavirus global response: EU Humanitarian Air Bridge to Iraq and new funding

ECB readies itself for extraordinary monetary measures defying Germany

Cross-roads

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: