ECB’s Lagarde Pledges No Premature Removal of Monetary Support

European Central Bank President Christine Lagarde pledged not to remove monetary support until the coronavirus crisis is over, reinforcing her message that central banks and fiscal authorities must work together.

“Macroeconomic policies in the euro area have acted forcefully, geared toward protecting productive capacity and jobs,” she said in an interview with the Harvard International Review published Wednesday. “We should guard against the premature withdrawal of these support measures.”

Most economists expect the central bank to increase stimulus by boosting its 1.35 trillion-euro ($1.6 trillion) bond-buying program before the end of the year. Lagarde spoke a day after she and ECB chief economist Philip Lane called on governments keep up their support, with the president warning against creating a “cliff edge” that undoes progress so far.

There are signs that the euro zone’s rebound since coronavirus lockdowns is petering out as virus infections pick up again, forcing governments to impose new restrictions.

72,049 in IndiaMost new cases today

-1% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23

-0.​9573 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23

5.​3% Global GDP Tracker (annualized), Aug.


Earlier on Wednesday, Germany reported a surprise drop in industrial production for August. France’s statistics agency said on Tuesday that it expects the nation’s economy -- the region’s second-largest -- to stagnate in the final three months of the year.

Southern European nations are faring even worse as their tourism industries are battered by curbs on travel and hospitality.

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