MNI POLICY: EZ Recovery Uncertain, Incomplete - ECB's Lagarde

Incoming data suggests the euro zone will see a strong economic rebound in the third quarter of 2020, European Central Bank President Christine Lagarde president told lawmakers in Germany's Bundestag, adding that it was time for Europe to "move beyond the initial priority of containing the immediate impact of the crisis and shape a common vision for its future."

However, the strength of the recovery remains "very uncertain, as well as uneven and incomplete," Lagarde said, and "continues to be highly dependent on the future evolution of the pandemic and the success of containment policies."

Lagarde highlighted exchange rates as one factor requiring "very careful assessment [...] with regard to its implications for the medium-term inflation outlook."

Fiscal support at both national and European levels has been "critically important" to fighting the effects of the Covid-19 pandemic on Europe's economies, she added, and will be necessary if the recovery is to strengthen further.

The pandemic also offers an "unmissable" opportunity to reduce and prevent climate risks and finance the necessary green transition, she said, while making sure labour markets remain inclusive. "If we don't," Lagarde said, "we risk creating a new divide, and we can already see gaps opening up when we look at differences in wages, education levels and gender."