* Lagarde, de Guindos and Villeroy seek to calm investors
* De Cos guides for no rate hike for over a year
* ECB under pressure from high inflation
FRANKFURT, Nov 29 (Reuters) - European Central Bank
policymakers sought to reassure investors rattled by a new
variant of the coronavirus on Monday, arguing that the euro
zone's economy had learned to cope with successive waves of the
Carrying a "very high" global risk of surges according to
the World Health Organization, the Omicron variant is
threatening a brisk economic revival and could jeopardize plans
by the ECB and other global central banks to dial back emergency
support after nearly two years.
But ECB President Christine Lagarde, her deputy Luis de
Guindos and French governor Francois Villeroy de Galhau put on a
"There is an obvious concern about the economic recovery in
2022, but I believe we have learnt a lot," Lagarde told Italian
broadcaster RAI late on Sunday.
"We now know our enemy and what measures to take. We are all
better equipped to respond to a risk of a fifth wave or the
She was echoed by her fellow countryman and ECB policymaker
Francois Villeroy de Galhau who said "successive waves have
proven so far to be less and less damaging, and this one
shouldn't presumably change the economic outlook too much."
ECB vice-president Luis de Guindos acknowledged the "high
degree of uncertainty" and called for keeping all policy options
open but he argued much higher vaccination rates should help
Europe better deal with these risks.
But Spain's central bank governor Pablo Hernandez de Cos
said the ECB should "err on the side of caution" when setting
policy and ventured a prediction for no hike in interest rates
until "some time" after next year.
Markets regained composure on Monday as investors awaited
further details of the variant, which has made some countries
reimpose travel curbs.
The ECB is under pressure to reduce its monetary stimulus,
starting from its 1.85 trillion euros ($2.09 trillion) Pandemic
Emergency Purchase Programme (PEPP), as euro zone inflation
makes multi-decade highs above 4%.
De Guindos said on Friday that PEPP would end in March as
planned and the debate among policymakers has mostly been on
what comes next, possibly including increased purchases under
the ECB's regular Asset Purchase Programme.
De Cos said the ECB should retain some of PEPP's
"flexibility," which has allowed the central bank to buy when
and where it was most needed - including sizeable amounts of
Italian and Spanish debt in the spring of 2020.
In a sign of caution, consumer sentiment in the euro zone
started turning south even before news of the variant broke last
week, data showed on Monday, and mobility also declined.
But the ECB has pledged to run PEPP only until the damage
wrought to inflation by the pandemic is repaired.
This has arguably happened, with inflation in the euro zone
seen hitting 4.4% this month and staying above the ECB's 2%
target next year.
ECB board member Isabel Schnabel said earlier inflation
likely peaked in November and there was "no indication" it would
settle above the ECB's goal.
($1 = 0.8861 euros)
(Reporting by Leigh Thomas in Paris, Jesus Aguado and Emma
Pinedo in Madrid, Gianluca Semeraro in Milan, Thomas Escritt in
Berlin; Writing by Francesco Canepa in Frankfurt
Editing by Gareth Jones and Chizu Nomiyama)