The European Central Bank (ECB), which is involved in measures to tighten monetary policy to fight inflation, must do everything possible to ensure that the effects of rising prices do not become permanent, the institution’s president, Christine Lagarde, said on Tuesday, as quoted by AFP.

In an economic environment deeply shaken by the consequences of the pandemic and the war in Ukraine, “monetary policy has not been able to prevent the initial effects of many of these shocks. But she can guarantee that they will not take root. That is what the ECB is,” Lagarde said in a speech in Frankfurt.

“We will not allow this phase of high inflation to affect economic behavior and create a lasting inflationary problem,” she added, acknowledging that price increases in the eurozone “have turned out to be much larger and more persistent than initially expected.”

Lagarde believes that the twin shocks of the pandemic and the Russian invasion of Ukraine “have led to changes in our economic environment,” which will have lasting consequences for the structure of supply and demand.

“The disruption of gas supplies due to the Russian incursion is a major structural change that will have consequences for many years,” she described, as fossil fuel prices “are likely to be higher for a period of time.”

“If energy prices are consistently higher during the transition, this could affect industrial production in Europe, affecting both supply and prices,” Lagarde said.

Similarly, “globalization is changing” due to the disruption caused by the Covid-19 pandemic, which has disrupted international supply chains.