Christine Lagarde Says Covid Vaccine ‘No Game Changer’ for ECB Stimulus Plans

European Central Bank President Christine Lagarde doesn’t see the news that a coronavirus vaccine is near as fundamentally altering the institution’s plan to add monetary stimulus.

Lagarde said in an interview at Bloomberg’s New Economy Forum on Tuesday that the central bank is focused on stopping the current economic slump from worsening, and that it always assumed a medical solution would be available in 2021.

“I’m not sure that it’s going to be a major game changer for our forecasts,” she told Francine Lacqua. “Before we had the news about a vaccine, we had negative news about the second wave and containment measures that affected one country after another.”

New lockdowns have put the euro zone on the verge of another contraction as winter starts. Lagarde reiterated that her institution will “recalibrate” its stimulus in December, widely understood as meaning it’ll add more monetary support for the economy.

The president also signaled that policy makers expect to focus on their 1.35 trillion-euro ($1.6 trillion) emergency bond-buying program and their long-term bank loans as the main tools. Investors see an interest-rate cut as unlikely.

“Those tools would be regarded as essential,” she said. “But everything would be debated.”

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Lagarde said a key concern is preventing the economic crisis morphing into a financial one.

“We need to stay really clear of that because that would be an aggravating factor,” she said. “I think 2021 will certainly be a difficult first half of the year, and we won’t have caught up with where we were pre-pandemic before the end of the year.”

The New Economy Forum is organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.

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