ECB President Christine Lagarde said in a Politco interview, “you don’t remove the crutches from a patient unless and until the muscles have started rebuilding sufficiently so that the patient can walk on his or her own two legs. ”

“The same applies to the economy,” She added. “We are at a turning point where, bearing in mind alternative variants, we are on that recovery path, heading firmly towards a return to the pre-COVID-19 level.

She also reiterated that ECB has indicated the PEPP program will continue “until at least March 2022 and, in any case, until the Governing Council judges that the pandemic crisis phase is over.” Eurozone seems to be “heading in the right decision”. But it’s “far too early to debate” ending the PEPP program.

Full interview here.

ECB Governing Council member Klass Knot said “as the current low interest rate environment is likely to persist, we need a structurally larger role for fiscal policy in macroeconomic stabilization for the foreseeable future.”

He hailed that the EUR 800B recovery fund was a “big step in the right direction”. “If it becomes a tangible success, it would of course set a precedent, with the promise of more to come.”

In the post meeting press conference, ECB President Christine Lagarde said, business and consumer surveys and high-frequency indicators point to a “sizeable improvement” in activity in Q2. Business surveys indicate a “strong recovery in services” while manufacturing production “remains robust”. Consumer confidence are “strengthening”, suggesting a strong rebound in private consumption in the period ahead. Business investments shows “resilience”.

According to the baseline scenario, ECB upgraded real GDP growth forecast in 2021 to 4.6% (up from 4.0%) , in 2022 to 4.7% (up from 4.1%). 2023 growth forecast was unchanged at 2.1%. Annual inflation is projected to be at 1.9% in 2021 (up from 1.5%), 1.5% in 2022 (up from 1.2%) and 1.4% in 2023 (unchanged).

Full statement here.

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Full introductory statement here.

ECB left main refinancing rate at 0.00% today, while marginal lending rate and deposit rate are held at 0.25% and -0.50% respectively. It maintained that interest rates will “remain at their present or lower levels” until inflation outlook robustly converge to price target of close to but below 2%.

The pandemic emergency purchase programme will continue with a total envelope of EUR 1850B, “until at least the end of March 2022”. More importantly, purchases will be conducted over the coming quarter at a “significantly higher pace” than during the first months of the year.

Full statement here.