ECB’s Lagarde: Europe Can Be Sure Financing Conditions Won’t Tighten Prematurely

1 March 2021

By David Barwick – FRANKFURT (Econostream) – Citizens and companies in the euro area can rest assured that there will be no premature tightening of financing conditions, European Central Bank President Christine Lagarde said Monday.

In a speech at a German business conference, a text of which was posted to the ECB’s website, Lagarde said that the ECB’s actions during the pandemic-related crisis had saved more than a million jobs.

‘But we are not out of the woods yet’, she continued. ‘With the tremendous progress made on vaccine technology, we can now see the light at the end of the tunnel. But we still cannot see exactly how long that tunnel is. We will continue to face a period of high uncertainty until more people have been vaccinated against the virus.’

Small and medium-size enterprises (SMEs) must be sure of the support of ‘a bridge to the other side of the pandemic’ that ‘remains in place for as long as needed’, she said. ‘The ECB will help ensure that firms and families can access the finance they need to weather this storm – and that they can do so in the confidence that financing conditions will not tighten prematurely.’

Promising to ensure favourable financing conditions is the best means of giving the economy the certainty it needs, stabilising the region and contributing to achieving price stability, she said.

The pandemic continues to weigh ‘heavily’, especially on the service sector, she said, as compared to manufacturing, which ‘has recovered quite well since the first lockdown last year, buoyed by solid global demand’.