Lagarde says the ECB takes the rise in inflation in the EU “very seriously”

The president of the European Central Bank (ECB), Christine Lagarde, reported that the institution takes “very seriously” the rise in prices in the European Union (EU) as a result of the economic impact of the pandemic.

“We understand that rising prices are a concern for many people and we take that concern very seriously.“Lagarde declared at the handover ceremony at the top of the German Bundesbank.

“But people can trust that our commitment to price stability is unwavering, which is critical to firmly anchoring inflation expectations and confidence in the currency.Lagarde added.

The president of the ECB assured that “The entire Governing Council is united in the pursuit of this objective. At the same time, one of the key strengths of the Eurosystem is the way it brings together different perspectives to form a consensus.”.

“Our rich quality of debate and diversity of viewpoints ensure that our decisions are sound.”, Defended Lagarde.

He referred to the fact that the ECB has an inflation target of 2% which is “simple and symmetric“, and I add: “we have rules for how to react when inflation deviates from our target in both directions. And we are clear about the tools in our monetary policy toolbox and how and when to use them.”.

And he added that the revision of the strategy on the evolution of prices in the ECB “It also sets out how we can contribute to addressing longer-term challenges that pose threats to price stability, in particular climate change.”.

Lagarde said that with this strategy the European countries “we are well positioned to continue to ensure price stability in this rapidly changing world. And that is especially important today in light of the phase of higher inflation that we are seeing.”.

Lagarde’s words came after the ECB announced last December the upward revision of its inflation forecasts compared to those it made in September due to the sharp increase in energy prices.

The ECB now forecasts growth in 2021 of 5.1% (5% expected in September) with inflation of 2.6% (2.2% expected in September).

When announcing these forecasts, Lagarde considered that “inflation could be higher if wages rise faster than expected”.

“Inflation will remain high in the short term, but we expect it to decline over the next yearLagarde said.

The President of the ECB welcomed the presidency of the Bundesbank, the German central bank, of Joachim Nagel, who replaces Jens Weidmann, who resigned in October by surprise, “For personal motives”, Effective as of December 31, after ten years in office.

Weidmann, a defender of an orthodox monetary policy, had replaced Axel Weber, who opposed the European Central Bank buying debt to face the sovereign debt crisis in the euro area.

The German Finance Minister, Christian Lindner, alluded in the same act to the defense of the principle of price stability by the Bundesbank and stated that despite being considered “a tradition“It is an element”Very current”.

Lindner said that principle is also a “fundamental element”Of the economic policies of the German Government and took the opportunity to praise the“solid reputation” and the “independence“Of the Bundesbank, that”has been a symbol of Germany for decades”.