- Eurozone economy to stagnate in the next few quarters
- Risks to inflation have become more balanced
- Fiscal impasse is starting to turn into a headache
The fear for the euro area now is that as the economy skirts around the risk of a recession, a second-round effect of inflation pressures would basically put them in a rather dire spot. Stagflation, anyone? Lagarde is trying to sound optimistic but surely she can’t say with unequivocal certainty that the ECB has done enough.