By Laurie Laird
STRASBOURG (MaceNews) – European Central Bank President Christine Lagarde heralded the strengthening euro zone labor market in remarks to the European Parliament on Tuesday, declining to address slowing European growth and a dramatic downturn in the German factory sector.
Unlike Federal Reserve Chair Jerome Powell, who has discussed the economic risks of the coronavirus that emanated from China, President Lagarde touted the ECB’s efforts to “shield the economy from global headwinds,” resulting in a fall in euro zone unemployment rate to 7.4%, the lowest since May of 2008″, and wage growth rising “significantly above its long-term average.”
Lagarde’s comments were in line with her optimistic language following the January ECB governing council meeting, when she described euro zone growth as “moderate,” a marked improvement in tone from her reference to “weak euro area growth dynamics” after the December rate-setting meeting.
Lagarde’s address to the European Parliament comes in the wake of a 2.1% plunge in German factory orders between November and December, leaving full-year orders nearly 9% below their level of 2018. Analysts believe coronavirus-related assembly line shutdowns in China could hit the German economy hard, with 9.2% of intermediate goods imported from China, according to the Munich-based ifo research house.
The ECB president acknowledged that “growth momentum has been slowing down since the start of 2018,” leaving “inflation some distance below our medium-term aim.” The euro zone expanded by just 1.2% in 2019, the slowest pace in six years. Lagarde repeated her call for greater fiscal support from euro zone governments, stressing that “monetary policy cannot be the only game in town.”
However, Lagarde’s address was scorned by some members of the European Parliament. German MEP Gunnar Beck criticized the ECB’s stimulus measures under previous president Mario Draghi, claiming no other central bank has “printed so much money since 1925,” only for the euro zone economy to fall further behind the U.S. Beck’s far-right Alternative for Germany Party has parlayed its censure of the ECB into electoral gain, and now serves as Germany’s official opposition party at federal level.