Euroland could “on average” return to current pre-pandemic levels, and thus emerge from the emergency phase, in the second half of 2022. The president of the European Central Bank, Christine Lagarde, explained, “with great caution” that the economy of the euro area is evolving in line with the ECB’s projections and that the exit from the emergency phase is expected in just over a year. “On average”, because not all countries, not all sectors, will be able to emerge from the crisis at the same time.
However, it is still too early to give indications on how the emergency programs launched by the Central Bank will evolve. The commitment to maintain very expansive and accommodating monetary conditions remains firm. Other indications are postponed at least until June 10, to the next meeting in which the new macroeconomic projections will be published.
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The April meeting of the Governing Council of the European Central Bank confirmed the ways and measures of the monetary policy package, last revised in March; and reiterated that purchases of securities under the Pepp pandemic emergency program will continue this quarter at a significantly faster pace than at the beginning of the year, to keep funding conditions under control and ensure an exit from the crisis.
More precise indications on what this more intense pace could mean but above all on how the ECB, which appears again divided between hawks and doves, intends to start at the end of the Pepp program, scheduled for March 2022, and of the pandemic crisis itself, are not instead you arrive.
To a specific question about the statements by Dutch Governor Klaas Knot, a hawk that Pepp purchases could soon be reduced to zero after March 2022, President Christine Lagarde simply retraced her assessment of the conditions of the Euroland economy, which was characterized by high uncertainty and risks still oriented downwards in the short term but more balanced than in the medium term.