In the prepared statement for ECON committee of the European Parliament, ECB President Christine Lagarde said Eurozone growth “remains weak” and has been “mainly due to global factors”. “Sluggish and uncertain” global outlook lowers demand for euro area goods and services and also affects business sentiment and investment. Manufacturing industry has been “suffering the most” and policymakers are also seeing “signs of spillover” to services. Nevertheless, consumption has held up “fairly well” with improving labor market conditions.
She added that the “relative resilience of services so far is the key reason why employment has not been affected by the global manufacturing slowdown.” The measures announced back in September were to ensuring that financing conditions remain favourable. The new two-tier regime of excess reserve remuneration will ensure that banks remain willing and able to pass on very accommodative financing conditions to the economy.