A look at European history shows that, whenever monetary policymakers have signalled a benign willingness to rescue a country from insolvency, this has put them at risk of neglecting their price control mandate. Monetary policy is compromised if it tries to serve two masters simultaneously.
Large parts of the euro area economy remain paralysed. Vaccination campaigns are progressing slowly, infection numbers are rising and containment measures are stricter than in other parts of the world. This interpretation is consistent with the picture painted by the latest ECB staff macroeconomic projections, which foresee an economic and inflation outlook that is largely unchanged from the December 2020 projections.