FRANKFURT—European Central Bank President Christine Lagarde sounded a cautiously optimistic note on Europe’s economic recovery despite a wave of Covid-19 infections that has closed shops, schools and businesses across the region, triggering a selloff in eurozone government debt.
At a news conference on Thursday, Ms. Lagarde said a resurgence of the pandemic in Europe was squeezing business investment and crimping consumer spending. But she highlighted recent developments such as the start of a Covid-19 vaccination campaign, a trade deal between the European Union and the U.K. and a new administration in the U.S.
The rollout of vaccines “allows for greater confidence in the resolution of the health crisis, [even if] it will take time until widespread immunity is achieved, and further adverse developments related to the pandemic cannot be ruled out,” Ms. Lagarde said.
The ECB kept its monetary stimulus unchanged at its policy meeting on Thursday, saying it would continue to buy up to €1.85 trillion ($2.25 trillion) of eurozone bonds through March 2022 under a plan unveiled in December. It left its key interest rate at minus 0.5%.
Analysts said the ECB’s economic assessment seemed complacent given a sluggish start to Europe’s vaccination campaign and recent moves across Europe to extend or tighten social restrictions.
