Christine Lagarde’s first full year as European Central Bank president is poised to end with the fanfare of another stimulus expansion for the region’s pandemic-crippled economy.
The ECB chief’s likely move this week to add emergency monetary aid and pledge ongoing support through an unprecedented crisis will mark a starkly different tone from her first press conference almost exactly 12 months ago, in what already seems a bygone age.
That day, Lagarde unveiled forecasts for modest growth in 2020 as she detailed the institution’s plans to spend the coming year reflecting on its strategy. The risk of economic disruption caused by disease didn’t feature on the list of threats she described, nor did it come up in a magazine interview published in early January.
When that horror materialized, the ECB found itself confronting financial-market turmoil that required a massive stimulus program to be quelled. Economists now predict the scope of that measure will exceed 1.8 trillion euros ($2.2 trillion) after the newest salvo this week — along with huge provisions of cheap loans for banks.
The global rollout of vaccines in 2021 might offer Lagarde the hope that next December’s monetary decision will be less dramatic than this one. But that too seems a distant prospect for now.
What Bloomberg Economics Say…
“Many policy makers have already signaled a preference for focusing on the two main tools used so far in the ECB’s crisis response — the Pandemic Emergency Purchase Program and Targeted Long-Term Refinancing Operations. We anticipate that both programs will be prolonged by six months to the end of 2021, but a nine or 12-month extension is a possibility.”
–Maeva Cousin, David Powell and Jamie Rush. For full PREVIEW, click here.
Elsewhere, European Union leaders continue to debate the bloc’s rescue fund and central bankers in Canada, Brazil and Ukraine are among monetary policy makers also meeting.
Click here for what happened last week and below is our wrap of what is coming up in the global economy.
Europe, Middle East, Africa
Monthly U.K. GDP data on Thursday is set to show the economy grew a moderate 0.2% in October in what was possibly the last expansion of 2020 before renewed lockdowns took hold across the country to combat resurgent infections of the coronavirus.
In evidence of underlying resilience in Europe’s biggest economy despite the crippling effects of the pandemic, German industrial production probably recorded a fourth monthly gain in October, with an…
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