The European Central Bank’s Chief Economist Philip Lane said that it is unlikely that the economy will revert back to its pre-crisis level until 2021.
“From today’s point of view, it seems, in any case, unlikely that economic activity will return to its pre-crisis level until 2021, if not later,” he said on an interview that was published in the European Central Bank’s website, adding that the bank is in the process of assessing the situation prior to the next meeting, If we see that financial conditions are too tight, or the pressure on the different bond markets are not reflecting economic fundamentals, we can adjust the size or the duration of our purchases, which we have already allocate flexibly across time and market segments,” he continued.
Lane explained that the current crisis is unprecedented, which makes it more difficult to predict how the recovery will look like. It has also highlighted the role of the fiscal response to the crisis, claiming that the north-south divide in these conditions, it is not necessarily negative, as the fact that countries such as Germany to take a stronger position could be in favour of the weaker countries.
“But it is also important that all countries, policy makers play a central role in this regard,” he commented, “We at the ECB, will ensure that financial conditions are sufficiently accommodative and stable for all countries,” he added.
As for the, they mainly concern heavily discussed the idea of the creation of a recovery fund, Lane said that the ECB policymakers are already discussing what form the fund should take in order to avoid an economic depression.
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One of the proposals under discussion is to increase the budget of the european UNION-and-have-the European Commission, and to distribute the funds,” he said, explaining that one of the benefits of this proposal would be that countries take the advantage ” of not having to change their national public debt significantly, which would allow them not to be prevented from other funding opportunities.
At the end of the interview, Lane stated that, despite the european UNION’s response may have been a little slow, to be part of the union, it was at the end of the day, of interest to countries such as Italy and Spain, at least in terms of stability. However, there is still much to be done to resolve the current crisis, in particular in terms of ensuring the availability of funding from the commission of the european UNION, members of the retrieve.
By 7:26 GMT, the Euro remained almost stable against the U.S. dollar, which is the addition of 0.03 percent, and hit the 1.0819 level. In contrast, it decreased by 0.07 per cent compared to the Pound Sterling, falling to the 0.8939 level.