October 19, 2020
08:01
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The European Central Bank says it has saved 1 million jobs through its stimulus policy and is ready to do even more. That’s what chairwoman Christine Lagarde says.
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Our toolbox is not empty. Christine Lagarde gives that message in a Monday interview with the French newspaper Le Monde. In it, the chairwoman of the European Central Bank (ECB) makes it clear that Frankfurt is ready to support the economy even more heavily during this second wave of the corona pandemic and that the governments must do the same.
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‘The job losses are the most serious here,’ she explains. ‘They pose a risk to the social fabric, household incomes, demand and growth. The governments in the eurozone must be very aware of this. We think it is essential that the safety net that governments put in place by putting their budgets into the red is not pulled too quickly. ‘
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Last weekend Paul De Grauwe, professor at the London School of Economics, also gave the same message in one interview with De Tijd. ‘When you go to war, you don’t ask,’ yes, but how much does it cost? ‘He said.
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Lagarde says this crisis has prompted Europe to rethink its rules on budgetary discipline. “It made us realize that we are in the same boat: a weakening of the already vulnerable economies would also make the strong suffer.”
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1 million jobs
Lagarde says the European Central Bank estimates that its policies secured 1 million jobs in March, April and June alone. Thanks to those same policies, the recession has been 1.3 percentage points less deep, and inflation – even if it is dropped below zero – 0.8 percentage point higher.
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The ECB estimates that the eurozone will shrink by 8 percent this year. Although she admits that the second wave of the coronavirus can make that recession even deeper.
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