European Central Bank urges quick recovery plan
Saturday, 06 20 2020, Category: Economy, Country: Europe
European Central Bank head Christine Lagarde urged European Union leaders on Friday to quickly agree on a recovery package that would pull the economy from a “dramatic fall” or risk a change in sentiment on markets, which were expecting a deal soon.
Lagarde addressed EU leaders, meeting by videoconference to wrangle over how to engineer a recovery from the deep recession caused by three months of coronavirus lockdowns in most European countries.
“(The) EU economy is experiencing a dramatic fall,” she told the gathering, according to officials.
“Decisive and effective action by both national governments and European actors has proven its worth: they paved the way for a rebound towards year-end and helped to buy some time. This is reflected in market sentiment, but failure to deliver could lead to a change in that sentiment,” she said.
Lagarde reiterated the ECB’s forecasts that the euro zone economy would shrink 13% in the second quarter from the first, and contract 8.7% overall in 2020, before rebounding by 5.2% in 2021.
She said the worst impact of the pandemic on labour markets was still to come, and that unemployment, now at 7.3% of the workforce, could rise to 10%, hitting young people particularly hard.