Christine Lagarde debates European recovery plans and the ECB’s recent decisions with EU Parliament

Dear Chair, Honourable members of the Economic and Monetary Affairs Committee, Ladies and Gentlemen, I am very happy to appear before this Committee again today. https://www.eudebates.tv/debates/eu-policies/economy/ecb-keeps-zero-rates-and-boosted-pepp-by-e600-billion/ While we are still meeting in a virtual setting, the health situation and economic prospects across Europe have improved on the back of significant progress in vaccinations − with more than 100 million people in the European Union now fully vaccinated. This makes me hopeful that we will meet again in person in Brussels in the near future. #ECB #Lagarde #eudebates #Economy #ECON #Eurozone #Euro #ESM #eudebates In my remarks today I will first discuss the economic outlook for the euro area before turning to the ECB’s monetary policy, including the recent decisions taken by the Governing Council. Finally, as per your explicit request, I will update you on our ongoing strategy review. The current macroeconomic and inflation outlook The outlook for the economy is indeed brightening as the pandemic situation improves, the vaccination campaigns progress, and confidence begins to rise. We expect economic activity to accelerate as of this quarter amid support from fiscal and monetary stimulus and a vigorous bounce-back of services activity in particular, which has been hardest hit by the pandemic and associated containment measures. Manufacturing production remains robust, although supply shortages, mainly related to difficulties in procuring materials and equipment, could generate some headwinds for industrial activity in the near term. Soft data also signal strong momentum in global activity, led by the rebound in advanced economies where vaccination rates have picked up. Additional fiscal support, most notably the US fiscal stimulus package, is also supporting the recovery. These developments boost foreign demand and so have positive spill-over effects on the euro area. Looking ahead, we expect economic activity to improve strongly in the second half of 2021, supported by a robust rebound in consumer spending and solid business investment. Our latest staff projections currently foresee annual real GDP growth at 4.6 per cent in 2021, 4.7 per cent…