The President of the European Central Bank (ECB), Christine Lagarde, called Thursday November 19 for the implementation “without delay” of the European recovery plan, at a time when Hungary and Poland block its adoption by the EU . “We continue to be faced with serious circumstances, both from a health and economic point of view,” said the central banker during a hearing before the European Parliament, before the 27 met during the day by videoconference to get out of this crisis.
If she did not directly mention the veto of the two central European countries at European level, the Frenchwoman insisted on the need for this historic envelope of 750 billion euros “to facilitate expansionary budgetary policies, particularly in the countries of the euro zone, whose budgetary space is limited ”. “The response to the crisis so far has also been a powerful illustration of how monetary policy and fiscal policy can be mutually reinforcing under the current circumstances,” she said.
Avoid sudden drops in savings
To date, euro area governments have implemented fiscal measures representing more than 4% of euro area GDP in 2020 alone, in addition to those relating to social spending. However, “the weakness of demand and the increased risk of a delayed recovery justify the maintenance of the support of the national budgetary policies” to prevent the economies from falling suddenly, estimated Ms. Lagarde.
The ECB will approach the current phase of the crisis “with the same approach and the same determination” as in the first wave, during which it claims to have reacted “quickly and vigorously” to the consequences on the economies of the euro zone , according to Christine Lagarde. Debt buybacks carried out under the PEPP emergency plan and giant loans to banks will remain “the main tools for adjusting our monetary policy,” she repeated. The ECB will meet in early December to decide on a new package of measures to support the economy in the euro zone.
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