ECB boss Largarde's forecast: economic normality will not be normal until mid-2022

Sunday, February 07, 2021

Forecast by ECB boss Largarde
Economic normality only in mid-2022

In the second corona year, ECB boss Christine Lagarde is cautiously optimistic about the future. She expects an economic upswing in the EU by the middle of the year, but also makes it clear that the pre-crisis level will not be reached before next year at the earliest.

For the President of the European Central Bank (ECB), Christine Lagarde, 2021 will be a year of economic recovery. "The economic recovery has been delayed, but has not been stopped," Lagarde told the Journal du Dimanche. An upswing is expected in the middle of the year, even if there are still many uncertainties. However, one is not safe from as yet unknown risks, she warned. "To be clear, we will not return to pre-pandemic economic activity until mid-2022," Lagarde said.

Lagarde is also convinced that the corona crisis has strengthened the European Union. "The decision of the member states to take out joint loans for the first time was an extraordinary moment of cohesion in the history of European integration," she told the newspaper. But now the pace must be maintained. After the crisis, the situation will be delicate, you shouldn't repeat the mistakes of the past, she stressed. The economies need to be supported flexibly and gradually declining as the pandemic subsides and recovery sets in.

"The economy will then have to learn again how to function without the extraordinary aid that the crisis has made necessary." A debt relief is inconceivable for Lagarde. It would be a violation of the European Treaty, she said. "It would make a lot more sense if the energy put into demanding ECB debt relief were devoted to a debate about how that debt is used. What is public spending used for? What sectors of the future to invest in? That is the central issue today, "said Lagarde.