Frankfurt (AFP)

The European Central Bank on Thursday confirmed its support for the economy, leaving its new president Christine Lagarde free to give a new breath on the communication side and announce a review of the strategy of the institution.

As expected, the arsenal of economic support announced in September by former President Mario Draghi has been kept the same, according to the statement of monetary policy decisions.

The main interest rate remains at zero, while banks will be charged a 0.50% levy on deposits they entrust to the central bank instead of lending them to their customers, in order to stimulate the distribution of credits.

Since the beginning of November, the ECB has also been buying public and private debt on the market, amounting to 20 billion euros per month and without a time horizon, in the hope of reviving an economy weighed down by trade tensions.

Attention is now turning to the traditional press conference from 13:30 GMT, which will mark the debut of Ms Lagarde in the monetary bath and should allow him to announce a broad review of the monetary policy strategy.

- Humility -

The breadth and timing of this unpublished review since 2003 remains unclear, but most of the thinking "should focus on the level of price one wants to achieve," said Eric Dor, director of economic studies at IESEG.

The idea would be to switch to a symmetric inflation target of around 2%, which can be slightly higher. The ECB would therefore skip the phrase "less than 2%", which proved too restrictive.

The institution could also incorporate the imperative of combating climate change into its monetary policy instruments.

During this first major oral monetary policy, the former head of the International Monetary Fund will be scrutinized on each of his words, the financial markets being on the lookout for any indication of its future decisions.

The new president has already struggled during her first weeks of mandate to pick up the pieces in a very divided monetary institute last September, when Mr Draghi had imposed a wide support system to the economy to a minority of restive central bankers. Which had openly rebelled in the following days.

The Frenchwoman, meanwhile, was humble in early December in front of the MEPs, saying that she was still "learning the language of the central banks", not to "disappoint those who think that every word carries the hundred years of monetary policy ".

But, she also said, "I will have my own way of dealing with some key issues".

- Shooting questions -

The ECB will present on Thursday its new set of macroeconomic forecasts, with an expected lowering of the growth target for 2020 and initial expectations of growth and inflation for 2022.

Lagarde should therefore be subjected to questions, including "the adequacy of monetary policy with the downturn," predicts Gilles Moec, an economist at Axa.

She will also be asked about the controversy around the negative rate on bank deposits, which is supposed to be a central tool to encourage banks to distribute credit, but which instead sees them, in Germany recently, begin to tax from the first cent the assets deposited by individuals opening a new savings account.

Enough to criticize the ECB in a country where you are used to saving for retirement.

Even unpopular, a further decline in the deposit rate is "likely in the first half of 2020" if the situation deteriorates, says Franck Dixmier, director of bond management at Allianz.

Lagarde should also hammer Thursday the fact that the ECB can not alone support the activity in the euro zone and remind the heads of state and government of the region to their budgetary and legislative duties, at the moment when Paris does faced with relentless social mobilization against its pension reform.

© 2019 AFP