• ECB: record fall in GDP in Europe, the second quarter will be tougher
  • Coronavirus, ECB: "Ready to give support, but a political response is needed"
  • ECB: interest rates remain unchanged

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June 04, 2020 The data coming in the last few weeks "confirm that the euro area is witnessing an unprecedented economic contraction, with heavy job losses and income that have led to significant falls in consumption and investment expenditure," said the president of the ECB, Christine Lagarde at the press conference at the end of the Governing Council in Frankfurt.

Rebound in the third quarter
There are signs that suggest "that the bottom has been hit, even if the recovery will be" lukewarm "after the end of the restrictions, ECB President Christine Lagarde said in the introductory statement to the press conference following the Governing Council meeting . The ECB expects a rebound in the euro area economy "will begin in the third quarter," said Lagarde, although the extent of the rebound remains "very uncertain". Lagarde also claimed that some believe that the crisis would "bottom out in May". 

Support for families and businesses
"Consistent with its mandate, the Governing Council is determined to continue supporting families and businesses in coping with the current disturbance of the economy and the conditions of greater uncertainty, in order to safeguard price stability in the medium term, "said the president of the ECB.

Welcome Recovery fund
The ECB welcomes the EU Commission proposal on the Recovery Fund: President Christine Lagarde in fact welcomes the Brussels initiative.

New macroeconomic framework
Lagarde has listed the new macroeconomic estimates prepared by the ECB staff, which show "in the base scenario a GDP of -8.5% in 2020 and + 5.2% in 2021 and + 3.3 in 2022" , with a strong downward revision for 2020 (-9.5 points) compared to the March estimates and upward for the following two years.

But these estimates - he specifies - depend on the "success of policies to mitigate" the effects of the pandemic. "The risks remain downward, however," he concludes. Eurozone inflation is expected to grow by 0.3% in 2020 to rise to 0.8% in 2021 and 1.3% in 2022, according to new estimates announced today at a press conference by the president of the ECB.