ECB’s Lagarde: Our Commitment Is Unwavering; Will Take Any Measures Necessary

14 January 2022

By David Barwick – FRANKFURT (Econostream) – The European Central Bank will do whatever is required to achieve its price stability target, ECB President Christine Lagarde said Friday.

In a speech at the meeting of the Conference of Parliamentary Committees for Union Affairs of the Parliaments of the European Union, Lagarde said that the factors behind high inflation would subside during the current year and that monetary authorities take ‘very seriously’ the rising price levels.

‘So let me reiterate that our commitment to price stability remains unwavering’, she said. ‘We will take any measures necessary to ensure that we deliver on our inflation target of 2% over the medium term.’

This is why the Governing Council last month embarked on a gradual reduction in the pace of net asset purchases, she said.

‘We also ensured that we have the flexibility to respond to a range of circumstances’, she said. ‘At the same time, we concluded that monetary accommodation is still needed for inflation to settle at 2% over the medium term.’

Whilst acknowledging the high Covid-19 case numbers, Lagarde said that Europe was ‘moving out of the emergency phase of the pandemic.’

The ambitious policy response to the crisis ‘has laid the groundwork for a strong recovery – much stronger than we imagined even a year ago’, she said. ‘But there is still a need for stabilising policy as we navigate our way out of the pandemic.’

Lagarde attributed more expensive energy to the rapid economic reopening and said the former was ‘cutting into household incomes and denting confidence, while supply bottlenecks are leading to shortages in the manufacturing sector.’