20 / 11 / 2020 fostering sustainable growth in europe speech fostering sustainable growth in europe keynote speech by christine lagarde, president of the ecb, at the european banking congress frankfurt am main, 20 november 2020 the coronavirus ( covid - 19 ) pandemic has rightly focused minds on the here and now – on saving lives and securing livelihoods. our immediate priority has been to protect the economy until widespread immunity is achieved. [ 1 ] yet the pandemic also provides the opportunity to reassess how we will organise our economy in the future. today ’ s conference, on the topic of “ towards a new sustainable growth model ”, comes at just the right moment. by necessity, the pandemic has accelerated our wider and more common use of digital technology. we have adjusted how we work, how we shop and how we pay. nearly 50 % of europeans say they have worked from home during the pandemic. e - commerce increased by almost one - fifth during the first lockdown [ 2 ], and it stayed at that level even after restrictions were lifted. we have seen a surge in online payments and a shift towards contactless : about 40 % of respondents to a recent survey say they have reduced their use of cash. such shifts are neither unusual nor unwelcome. major technological advances have been recurring features in our history. two centuries ago, land transport was powered by oats rather than by oil. a century ago, agriculture accounted for almost 60 % of employment in spain, and more than 40 % in france. [ 4 ] last year, the share was less than 4 % in both countries. faster digitalisation offers many benefits. it could lead to a less resource - intensive economy, allowing carbon emissions to be decoupled from economic growth more quickly. it could give a jolt to productivity, especially in europe : consider that it adoption has been a key factor in the united states exhibiting faster productivity growth than europe since the 1990s. faster digitalisation could also democratise access to essential services, such as health and education. in the united states, it is estimated that only 11 % of consumers used telemedicine in 2019, but that number has increased to 46 % during the pandemic and 76 % are interested in using it in the future. but technological transitions have not always been smooth – and that can be a source of anxiety. the decline of previously successful industries has sometimes led to high long - term unemployment and regions

march 2021 ecb staff macroeconomic projections for the euro area, which foresee annual real gdp growth at 4. 0 per cent in 2021, 4. 1 per cent in 2022 and 2. 1 per cent in 2023, broadly unchanged compared with the december 2020 eurosystem staff macroeconomic projections. 1 the risks surrounding the euro area growth outlook over the medium term have become more balanced owing to better prospects for the global economy and progress in vaccination campaigns. however, downside risks remain in the near term, mainly related to the spread of virus mutations and the implications of the ongoing pandemic for economic and financial 1 / 4 bis central bankers'speeches conditions. euro area annual inflation has picked up over recent months, mainly on account of some transitory factors. headline inflation is likely to increase in the coming months, but some volatility is expected throughout 2021 reflecting the changing dynamics of the idiosyncratic factors which are currently pushing inflation up but which can be expected to fade out early next year. underlying price pressures are expected to increase somewhat this year due to current supply constraints and the recovery in domestic demand. nevertheless, we judge that these pressures will remain subdued overall, also reflecting low wage dynamics and the past appreciation of the euro. once the impact of the pandemic fades, the unwinding of the high level of slack, supported by accommodative fiscal and monetary policies, will contribute to a gradual increase in inflation over the medium term. survey - based measures and market - based indicators of longer - term inflation expectations remain at subdued levels. while our latest staff projection exercise foresees a gradual increase in underlying inflation pressures, the medium - term inflation outlook – with projected annual inflation at 1. 5 per cent in 2021, 1. 2 per cent in 2022 and 1. 4 per cent in 2023 – remains broadly unchanged from the staff projections in december 2020 and below our inflation aim. the ecb ’ s monetary policy stance and effectiveness against this background, preserving favourable financing conditions over the pandemic period remains essential to reduce uncertainty and bolster confidence, thereby underpinning economic activity and safeguarding medium - term price stability. let me further elaborate on our assessment of financing conditions. this is defined by a holistic and multifaceted set of indicators. it is holistic because we consider a broad array of indicators, spanning the entire transmission chain of monetary policy from risk - free interest rates and sovereign bond yields to corporate bond yields