Possible bankruptcy of Evergrande: exposure of the euro zone “would be limited”, according to Lagarde – archyde

The President of the European Central Bank, Christine Lagarde, put into perspective on Friday the impact that a possible bankruptcy of the ultra-indebted Chinese real estate giant Evergrande would have for the euro zone.

“I have very vivid memories of the latest stock market developments in China which have had an impact across the world,” but “in Europe and in the euro area in particular, direct exposure would be limited,” said the Frenchwoman. in an interview with CNBC.

“At the moment, what we are seeing is a China-centric impact and exposure,” she added, as the ECB is watching the situation closely, given the interconnectedness of financial markets on the planet.

The private conglomerate is drowning in debt of 260 billion euros. A default could result in a sharp slowdown in the construction sectors in China and cause turmoil in world markets.

A time among the greatest fortunes of China, the chairman of the group Xu Jiayin stressed Wednesday evening that the group must “do everything possible to honor” its commitments.

Evolution of the share price of Chinese real estate giant Evergrande since the start of the year (AFP /)

Asked also about the risk of persistent inflation in the euro zone, which in August exceeded the 2% target set by the ECB in the medium term, Ms. Lagarde said she expected “a return to much more stability. in the coming year “because” many of the causes of the price increase are temporary “.

“It has a lot to do with energy prices,” she said, the other main temporary effect being the VAT hike in Germany, after the 3 point cut applied to the second part. 2020 to support consumption against the backdrop of the Covid-19 pandemic.

jpl / ngu