ECB’s Lagarde: We Are Better Equipped to Respond to Fifth Wave or Omicron Variant

7 December 2021

By David Barwick – FRANKFURT (Econostream) – European Central Bank President Christine Lagarde on Tuesday indicated that the Omicron variant of the coronavirus constituted a risk but suggested that it was manageable.

In an interview with Italian television talk show Che Tempo Che Fa, Lagarde said that ‘2021 will not be affected by the measures that we are starting to see here and there’ in response to Omicron, but that the variant ‘is obviously a risk weighing on the conditions of next year's recovery.’

However, authorities now know how to respond, medical solutions exist and ‘we are better equipped to respond to the risk of a fifth wave or the Omicron variant’, she said.

Lagarde reiterated the view that ‘the inflation that we see today is mainly due to temporary phenomena’ and that supply constraints ‘will also fade, because demand and supply will readjust.’

Asked whether she expected Germany to become more critical of the ECB’s expansive policy stance with the change of chancellor, Lagarde noted that German leaders, if not the media and the public, ‘have always been very respectful of the independence of the European Central Bank.’

Lagarde evaded the question of whether the ECB’s expansive monetary policy was still without limits, referring to ‘our unlimited commitment to the euro’, but otherwise essentially just noting that from this was born the pandemic emergency purchase programme (PEPP).