Luis de Guindos: “The recovery will continue despite the sixth wave of the coronavirus”

The vice president of the European Central Bank (ECB), Luis de Guindos believes that the sixth wave of coronavirus infections will have a lesser impact than the previous ones and that the European economy will continue to expand. “I am convinced that the European economy will continue to expand. Economic activity has been adapting to these types of measures and governments are much better prepared than before, “he said.” We must also hope that containment measures are not like in previous waves, “he added.

De Guindos closed the 11th edition of the La Noche de la Economía awards held this Tuesday at CaixaForum Madrid. The vice president of the ECB asserted that the European economy remains on the path of recovery. “This quarter, all the economies of the euro area will regain their pre-Covid income levels,” he explained. However, de Guindos acknowledged that there has been a loss of traction in the last quarter. “In the third quarter a bit of inertia has been lost but, without a doubt, this year will be a recovery exercise in Europe,” he said.

The vice president of the ECB warned that, at the moment, the European economy “is at a crossroads”. As he explained, the EU “has two headwinds.” On the one hand, he pointed to bottlenecks, supply chain failures and rising prices. On the other, the “especially virulent” coronavirus outbreaks that are appearing in central Europe. Luis de Guindos wanted to remember the companies during his speech. In his opinion, “the recovery of the economy has had a positive effect on financial stability.” De Guindos added that “there has not been that wave of insolvencies that was announced.”

On the other hand, he said yesterday that “all inflation factors in Europe are transitory.” However, de Guindos specified that “we must act so that they do not become permanent.”

De Guindos stressed during his speech that, in terms of prices, the ECB is now focusing “on avoiding second-round effects.” The ECB Vice President acknowledged that “after a time of negative inflation, we now find that the indicator is rising notably due to supply problems caused by the prices of raw materials, energy and bottlenecks” .

The economist and vice president of the European Supervisor also pointed to the performance of unemployment after the coronavirus crisis. De Guindos pointed out that, although the levels prior to the coronavirus crisis have already recovered, in terms of hours worked “we are still at levels below the situation that existed before the outbreak of the virus in Europe.”