ECB’s Makhlouf: Delta ‘More Likely to Delay Recovery Than Fundamentally Change It’

9 July 2021

By David Barwick – FRANKFURT (Econostream) – The delta variant of the coronavirus will probably delay the economic recovery without having a large effect on it, European Central Bank Governing Council member Gabriel Makhlouf said on Friday.

In an interview with the newspaper the Irish Times, Makhlouf said the mutation is ‘more likely to delay recovery than fundamentally change it’.

Although progress in vaccination was having a positive effect, he said, ‘[o]n the other hand you can’t help feeling uneasy about the growth in the number of cases’ in many countries.

Makhlouf was quoted as calling the UK’s decision to lift all pandemic containment restrictions ‘remarkable’, and said developments there would be watched closely.

The ECB’s new inflation objective would not change monetary policy in the short run, he said. ‘For me this is all about achieving clarity’, he said.

‘We are not doing what the Fed is doing’, he said, meaning that the ECB is ‘not having make-up strategies’ to compensate for having missed the inflation target. Still, overshooting in the euro area would be possible, which he described as ‘an incidental overshoot’ for a ‘transitory’ period.