In the view of Christine Lagarde, President of the European Central Bank, despite the beginning of the economic recovery, it is not yet time for a discussion about ending the central bank’s purchase of crisis bonds. “It is too early to discuss these issues,” Lagarde told Politico in an interview posted on the ECB’s website on Monday. Economic recovery must be solid, robust and sustainableمست
Do not remove the crutches from the patient until the muscle begins to build up enough to move the patient on their legs again. “We are at a turning point,” Lagarde said. Alternative virus alternatives must be considered, but the economy is improving and progressing toward pre-crisis levels. According to the latest economic forecasts by central bank economists, it is likely to achieve this again during the first quarter of 2022. However, Lagarde indicated that she was not hinting that the PEPP emergency purchase program will stop on March 31.
“We have enough flexibility, but in terms of the economic outlook, we are moving in the right direction,” said the ECB president. Economists currently assume that the board will discuss ending PEPP purchases at its September meeting. The European Central Bank decided on Thursday at its interest rate meeting that bond purchases of the trillion dollar crisis program PEPP should be significantly more comprehensive in the next quarter than they were at the beginning of the year. The program, worth at least 1.85 trillion euros, is scheduled to run until the end of March 2022 and in any case until the crisis phase is over. PEPP is one of the most important weapons used by the Euro Guard in combating the economic consequences of the epidemic.
In the interview, Lagarde also commented on the dispute over the German Federal Constitutional Court’s ruling in May 2020. At the time, the court classified the ECB’s older government bond purchase program as partially unconstitutional. The Karlsruhe judges thus disputed the European Court of Justice (ECJ), which ruled at the end of 2018 that the purchases did not violate EU law. Lagarde noted that the EU should not only pay attention to the German Constitutional Court, but to all constitutional courts or higher courts in countries. “But as far as we are concerned, we are subject to European law and are subject to the jurisdiction of the European Court of Justice,” the central bank chief said.
The EU Commission has now initiated infringement proceedings against Germany due to the ruling of the Karlsruhe judges. You see a dangerous precedent in the ruling. The Commission fears that the integrity of EU law and eventually European integration will be compromised. The Commission focuses in particular on countries where it already sees a weakening of the rule of law.
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