European Central Bank President Christine Lagarde said “the current inflationary shock is a major challenge for the bank’s monetary policy” and that it will “take as long as it takes to stop it”.

Lagarde, in her speech at the opening of the annual forum of the European Central Bank in Portugal, did not rule out that “excessively high inflation will continue in the eurozone for some time.” She pointed out that “avoiding differences between sovereign interest rates on loans is a necessary condition for the correct transmission of monetary policy in all 19 countries of the eurozone”, and continued that “only within this framework can interest rates rise as much as necessary.”

The head of the Central Bank pointed out that this new instrument “should be effective and proportionate and contain sufficient guarantees to support the dynamics of member states in the direction of prudent fiscal policy”, and continued: “But we still expect positive growth rates due to domestic support of the economy.”

It is worth noting that the ultimate goal of the ECB is to return inflation to a level close to 2%, while in May last year in the euro area it peaked at more than 8%, and observers do not exclude that inflation will rise. further in the coming months, due to the persistence of the reasons that led to this, in particular, the consequences of the Russian war in Ukraine; Thus, the European Central Bank is faced with the dilemma of raising interest rates too quickly, which could send the eurozone into recession, especially as the European financial institution earlier downgraded its growth forecast for the next two years.