ECB President Christine Lagarde said “the improved economic outlook on the back of rapid progress in vaccination campaigns has reduced the probability of severe scenarios.” But, “the nascent recovery still faces uncertainty also due to the spread of virus mutations.”
Meanwhile, the European Systemic Risk Board warned in a report that spillover effects from higher US bonds yields “could weigh on EU economic activity if the steepening of the yield curve were to perceptibly precede the economic recovery in the EU.”
“A perceptibly-stronger-than-currently-observed rise in European sovereign bond yields could have an adverse impact on debt dynamics, most notably in countries that already entered the COVID-19 crisis with an elevated debt burden,” the ESRB added.
