Attending the first Monetary Dialogue in Parliament’s Economic and Monetary Affairs Committee since the attack by Russia on Ukraine and a significant uptick of inflation across the Eurozone, European Central Bank (ECB) Christine Lagarde acknowledged that pressures on Eurozone economies had increased significantly and outlined the next steps the ECB would be taking to counter these pressures. She said that the negative effects on the economies were expected to gradually fade away but also that inflation would remain unusually high for a while, with increased risks to the financial systems’ stability. She also provided some more details of what the ECB envisions doing with its new anti-fragmentation mechanism, aimed at addressing economic dislocations within the Eurozone.

The committee’s Chair, Irene Tinagli (S&D, IT), said the meeting was particularly appropriate to “hear what the ECB can do and cannot do to deal with the economic consequences of the war in Ukraine and see…