European Central Bank sees 'considerable decline' in euro area activity

Agence France-Presse

Posted at Mar 20 2020 08:15 AM | Updated as of Mar 20 2020 08:21 AM

European Central Bank sees 'considerable decline' in euro area activity 1
The European Central Bank (ECB) logo is pictured before a news conference on the outcome of the meeting of the Governing Council in Frankfurt, Germany. Ralph Orlowski, Reuters/file

BERLIN -- The president of the European Central Bank (ECB) Christine Lagarde said Thursday that the novel coronavirus pandemic would lead to a "considerable decline" in economic activity in the euro area.

In an op-ed published in several European newspapers, Lagarde said that as governments imposed containment measures to slow contagion, "a large part of the economy is being switched off. As a result, economic activity across the euro area will decline considerably."

"Public policies cannot prevent this. What they can do is ensure that the downturn is no longer and deeper than it needs to be," she added.

Lagarde said the pandemic was "an unbearable human tragedy" with "few precedents in recent history" and said the ECB would do all it could to assuage the economic impact.

"We will do everything necessary within our mandate to help the euro area through this crisis, because the ECB is at the service of the European people," she said.

The op-ed comes a day after the bank unveiled its "Pandemic Emergency Programme", pledging to spend 750 billion euros ($800 billion) on emergency bond purchases in an effort to contain the economic damage from COVID-19.

The move followed criticism that the bank was not doing enough to shore up the eurozone economy, after a big-bank stimulus package unveiled last week failed to calm nervous markets.

On Thursday, Lagarde underlined the ECB's readiness to take even more drastic measures if necessary.

"If self-imposed limits hamper action that we are required to take to fulfill our mandate, we will revise these limits to the extent necessary to make our action proportionate to the risks we face," she said.

"We are fully prepared to further increase the size of our asset purchase programs and adjust their composition, by as much as necessary and for as long as needed."

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