ECB’s Lagarde: As Pandemic Passes, Must Shift Focus to Transforming Economy

29 June, 2021

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Tuesday implicitly recognised the waning of the pandemic-related crisis and called for the focus to shift in tandem with this development from preserving to transforming the economy.

In a speech for the Brussels Economic Forum published on the ECB’s website and devoid of comments directly on monetary policy, Lagarde said, ‘During the pandemic, we have mainly been acting to preserve the economy, which was the necessary thing to do.’

‘But as the pandemic passes, we need to shift the focus from preserving the economy to transforming it’, she said. In particular, she made clear, that meant a greener, more digital economy.

‘The pandemic has accelerated pre-existing trends at a pace we could never have imagined’, she said. ‘There are possibilities for our economy in 2022 which seemed at least a decade away in 2019.’

Businesses have gone digital 20 to 25 times faster than they had thought feasible, and 20% of workdays would take place in home offices after the pandemic, versus 5% previously, she said.

‘And the call for greener lifestyles has become thunderous’, she continued. ‘Having accepted tough restrictions to fight the pandemic, 70% of Europeans are now in favour of stricter government measures to fight climate change.’

Lagarde urged that the NGEU recovery fund be flanked by a ‘green capital markets union’.