Frankfurt (AFP)

Without touching its monetary policy, the European Central Bank should deliver on Thursday clues to the overhaul of its strategy, the major project of the year, and reduce its pessimism about economic risks.

In almost three months at the head of the institution, Christine Lagarde, appreciated for her collegial management and her warm approach, "should enjoy her honeymoon without having to worry about immediate political decisions," said Andrew Kenningham, economist at Capital Economics.

In other words, the guardians of the euro should not change the package of measures imposed in September by Mario Draghi at the end of his mandate, at the cost of unprecedented internal divisions.

- Symmetrical lens -

If Ms. Lagarde has endeavored to resolder the council of 25 members, in addition renewed in part, she is expected on the merits: to specify the contours of her strategic review of monetary policy promised this year. The exercise has not been carried out since 2003, and comes after eight years of Mario Draghi's mandate punctuated by crises.

The "most important" part of the review "will focus on defining price stability and how to achieve it," said Carsten Brzeski, economist at ING.

This stability has been defined since 2003 by an inflation target "close to but below 2%", behind which the ECB has been running for seven years and which it could reformulate by introducing the idea of ​​"symmetry".

Inflation could thus deviate from one side as from the other around a pivot at 2%, without this pushing the institution to immediately adjust its policy.

What "remain quiet" to leave interest rates longer at their historic low, said Mr. Brzeski.

This clarification would also be "useful in limiting disagreements within the board of governors", adds Alain Durré, chief economist at Goldman Sachs.

As Ms. Lagarde has promised to "turn every stone" by consulting widely throughout the year, strategic thinking should also include a more collegial conduct of monetary policy, the side effects caused by exceptional tools like the negative rate and, new point , taking climate issues into account.

- Risk analysis -

This would, for example, involve "greening" the purchase of public and private bonds, the famous "QE" by which the ECB has committed more than 2.6 trillion euros since 2015 to support the economy, by orienting it towards titles that meet environmental criteria.

The Frenchwoman will also be scrutinized on her assessment of economic risks, which she had judged in December to be slightly less significant. On this subject, any semantic shift could make the markets react.

Also, Ms. Lagarde will have to weigh her words after the new threat from Washington on Wednesday to overtax European cars if Europeans do not abandon their plans for a digital tax, or do not sign a trade agreement with the United States.

European Commission President Ursula von der Leyen replied that such an agreement should be possible "in a few weeks", like the Sino-American truce.

The cyclical risks seem to be attenuating, the recession in the manufacturing sector in the euro zone seems to be touching a floor while inflation rose to 1.3% in December.

Expected in front of the press at 13:30 GMT, the boss of the ECB should therefore deliver a "more optimistic assessment of the risk to growth", without announcing "turning to a more stringent policy", summarizes M.Durré.

Unless there is a cataclysm, the ECB will therefore keep its deposit rate at -0.50%, which amounts to taxing the banks on the funds they entrust to the central bank instead of lending them.

This deposit rate could be raised from March to -0.60%, prognostic Ludovic Subran, chief economist of Allianz, even if the markets do not anticipate for their part "no movement in 2020", underlines Frank Dixmier, director of management AllianzGI bondholders.

© 2020 AFP