HEALTH PASS FACING THE DELTA VARIANT AND ECB FACING ITS MANDATE

The july 22, 2021

Topic more relevant than ever: COVID-19

Between Variant Delta and health pass, debrief on what is happening.

As we were able to discuss in our article last week, according to the government, growth in France has been doing quite well, a figure to remember: + 6% for 2021.

One fear : that the new restrictions announced with the health pass will somewhat undermine this positivism.

Indeed, we cannot ignore that the probability that this new wave will weaken the economic recovery is not zero.

However, according to the Banque de France, let us be reassured, it is not. Also according to the latter, the extension of the health pass could have a strong impact and thus increase the number of vaccinations, which would consolidate our growth.

Let us also take into consideration that discussions are still being held regarding these new measures and therefore the situation with the health pass continues to evolve. The highest administrative court gave its agreement on Monday for the health pass to be extended. However, it has reservations about the access conditions envisaged for shopping centers.

Indeed, if we rely on what had been announced on the obligation of the sanitary pass, to be able to go to a shopping center, we can clearly see that a reversal of these requirements is being carried out, by applying this measure only to shopping centers of more than 20,000 square meters.

The fine envisaged for restaurateurs who do not respect the systematic control of the health pass of its customers could also be reduced.

As you will have understood, the measures taken to deal with this Delta variant are not yet set in stone and we will remain attentive and on the lookout for all new development perspectives as to the future of the 'economy.

ECB takes new steps

The main mission of the ECB (European Central Bank) is to maintain price stability. The latter aims to ensure economic growth but also to protect jobs and preserve purchasing power. In short, it aims to prevent prices from rising sharply, which is inflation, and it also aims to prevent a continued fall in prices, which is deflation.

It is the Harmonized Consumer Price Index which measures the annual rate of inflation, which describes the latter to be "below but close to 2% in the medium term". This benchmark enables the ECB's performance to be measured and to show transparency in the measures it takes. These measures concern, you will understand, the whole of the Euro Zone.

What interests us now is whether the ECB will finally stick to its mandate of price stability. Until now unable to respect it, the details to be expected will have a definite impact on its credibility.

As seen above, since 2003 the inflation target must be close to, but below 2%, currently the trend is towards a systemic objective of 2% in the medium term.This measure will allow inflation, however moderate, above the target for a so-called "transitional" period.

Faced with such a strategy, a questioning is legitimate:

With the PEPP due to end in March 2022, what arrangements will be considered to constitute future programs? What amounts are we talking about? And for how long? Faced with an inflation announced above 2%, what will be the room for maneuver really possible? And when we are told about the transitional period, what is it really about?

Every year, in July, the monetary policy meeting of the European Central Bank is held. In previous years, the latter could have been felt more like a formality, awaiting the meeting which is held in September. However, with the release of the updated economic projection, including its new inflation target, the July 22 monetary policy meeting will prove to be crucial.

Wealth A7, always by your side to bring your desires to life.

Share

Article by : Noémie MARZLOFF

Request for consultation

32, rue d’Alsace Lorraine 31000 Toulouse

?>

Phone : +(33) 6 27 36 33 53 - contact@wealth-A7.com