ECB keeps monetary policy on hold, will monitor rise of euro

European Central Bank (ECB) President Christine Lagarde attends a press conference at the ECB headquarters in Frankfurt, Germany, on Sept. 10, 2020. The European Central Bank (ECB) on Thursday decided to keep key interest rates unchanged and made no changes to its forward guidance and asset purchase programs.… #ECB Press Conference #Lagarde #eudebates #Economy #ECON #Eurozone #Euro #ESM #eudebates

On our strategy review, as you know we had to pause for a little while because of COVID and because of the necessity to actually concentrate all the brain power and all the forces of the ECB on devising those new tools and making sure that we could actually respond to the objectives that we had.… #ECB Press Conference #Lagarde #eudebates #Economy #ECON #Eurozone #Euro #ESM #eudebates

We are now resuming our strategy review with the appropriate sequence of seminars with reactivated work in the various work streams that have been identified. Let me just give you – I know that you’re probably familiar with it already – but mention for all the audience the various work streams that we have. I think it really demonstrates the scope of our review and the depth that we want to develop in so doing. We will cover topics like inflation measurements; that’s an important one that is often debated. That’s coming up on September 23rd. We will also work on the ECB’s price stability objective, as I said earlier. It’s one of our key focuses. Euro system modelling, very important in order to identify whether we are capturing all the right ingredients and whether we are working them out in the adequate way.

We will also discuss digitalisation and the impact that it has from a monetary policy point of view. I have in mind, obviously, such matters as the payment system, the euro digital currency, possibly. Our topics will include climate change as those who listen carefully to me, it’s a topic that I am very keen about, which I believe has a systemic dimension that applies actually to price stability. We will include also financial stability and macroprudential policies, non-bank financial intermediation, communication and the interaction between monetary policy and fiscal policies. Now, I have limited illusion about the absence of leaks in all the work that will be done, but my hope is that we can have sufficiently cohesive a process so that we can actually as we move along possibly signal directions without actually settling on any particular final considerations, because all these topics actually interact and will matter when it comes to defining our overall strategy.

That’s really what I wanted to say about our strategy review, added to which there will be a public dimension to it because we will have, inspired by the Fed process actually, which itself was inspired by the Canadian central bank, we will have an outreach that will really include as many stakeholders as possible ranging from NGOs and civil society to obviously members of parliament, and particularly the European Parliament, with which we will have a constant dialogue.

On the issue of divergence, I think that’s what I tried to say when I used the words uneven, incomplete and uncertain. As a result of these three components, we are likely to see divergence. We are seeing divergence actually, depending on how bad countries were hit by coronavirus, depending on what fiscal position they started from, depending on how much fiscal space they had available, depending on the strength of their banking sector and so on and so forth.

What we are hoping is that the European Union instrument that has been decided, the Next Generation EU fund, will actually address some of those divergences and dispersions within the euro area and within the European Union as well in order to direct as much as possible of the funding, particularly in terms of grants, to those countries that have been most hit and that are likely to come out of the process with less recovery than the others. I think that the flexibility that we have embedded in PEPP is also a tool that we have used in order to help in that process.

Je voudrais juste évoquer un instant la mémoire d’Antoine Rufenacht, qui était un homme d’Etat dont l’enterrement a lieu précisément aujourd’hui alors je vous parle et qui était quelqu’un qui comptais beaucoup pour moi. Merci. #eudebates

The European Central Bank discussed the appreciation of the euro at its latest policy meeting due to the downward pressure it puts on inflation, ECB President Christine Lagarde said on Thursday.… #ECB Press Conference #Lagarde #eudebates #Economy #ECON #Eurozone #Euro #ESM #eudebates