Lagarde believes that the possible bankruptcy of Evergrande will have limited effects in the euro zone – Market Research Telecast

The president of the European Central Bank (ECB), Christine Lagarde, put down on Friday the impact that a possible bankruptcy of the Chinese real estate giant Evergrande would have on the euro zone.

I have very present memories of the latest events in the Chinese stock market, which have had an impact around the world, but in Europe and, in the Eurozone in particular, direct exposure would be limited, said the French economist in an interview with CNBC.

At the moment, what we see is a China-focused impact and exposure, Lagarde added, while acknowledging that the ECB is closely watching the situation, given the interconnectedness of financial markets around the world.

The debts of the private conglomerate reach 305,000 million dollars.

A possible default would generate a sharp slowdown in the construction sector in China and cause repercussions on world markets.

Group president Xu Jiayin, which had one of the largest fortunes in the Asian country, stressed on Wednesday that his group must do everything possible to fulfill its commitments.

Asked about the risk of constant inflation in the euro zone, which in August exceeded the 2% target set by the ECB for the medium term, Lagarde said that she expected a return to much greater stability next year, since many of the causes of price increases are temporary.

It has a lot to do with energy prices, said the president of the European banking supervisor, although she added as another factor the increase in VAT in Germany, after the three-point decrease applied in the second half of 2020 to sustain consumption due to the covid-19 pandemic.

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Lagarde believes that the possible bankruptcy of Evergrande will have limited effects in the euro zone - Market Research Telecast