Europe’s central banker: Recovery ‘risks losing momentum’

FRANKFURT, Germany (AP) — The head of the European Central Bank (ECB) said that the economic recovery “risks losing momentum” due to the second wave of coronavirus infections and that the chief monetary authority for the euro countries could add more stimulus if that becomes necessary.

Christine Lagarde was quoted as saying in an interview with the French newspaper Le Monde that “the second wave of the pandemic in Europe, notably in France, and the resulting new restrictions are adding to the uncertainty and weighing on the recovery.”

“Since the rebound we saw over the summer, the recovery has been uneven, uncertain and incomplete and now risks losing momentum,” she said in the interview published yesterday in English on the ECB’s website. Lagarde said that “the options in our toolbox have not been exhausted.

“If more has to be done, we will do more.”

The ECB is already supporting the economy with a pandemic emergency programme of bond purchases that are pumping EUR1.35 trillion (USD1.58 trillion) in newly created money into the economy.

Analysts think the bank may eventually add more stimulus due to weak inflation and slowing growth from the upsurge in infections, along with any new restrictions on travel and activity that may be imposed by governments to slow the spread.

Head of the European Central Bank Christine Lagarde. PHOTO: AP