Financial markets have calmed down enormously


ECB president, Christine Lagarde, remarks in an interview with the FT

  • ECB actions had demonstrated their efficiency, effectiveness
  • But economic recovery would be constrained, uncertain and fragmented
  • Some euro area countries will recover more quickly than others
  • “I wouldn’t put all my bets on 18 July” (on EU recovery fund)
  • Says would give it until month-end for a potentially favourable outcome

She also dropped some hints about next week’s ECB policy meeting by saying that “we have done so much that we have quite a bit of time to assess incoming data carefully”. Not that it is a surprise, but that just reaffirms market expectations at this stage.

Other than that, the key takeaway is that even Lagarde herself isn’t entirely confident that EU member states can reach a compromise on the recovery fund before the break.

The full interview can be found here (may be gated).

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