Coronavirus: Christine Lagarde calls on Europe to unite to overcome the economic shock

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The President of the European Central Bank spoke on Thursday, April 9, to discuss the financial crisis that accompanies the health crisis linked to the coronavirus pandemic. Christine Lagarde distills a few tracks and some advice, including one major: the salvation of European countries depends on their unity.

Publicity

His word is among the most important in the current context. Christine Lagarde chose to speak this Thursday, April 9, and she did not skimp on the channels: a forum in Le Monde , an interview in Le Parisien , an intervention on France Inter ... The patron of the European Central Bank ( BCE) had messages to get across.

Recession and tension in Europe

His media interventions come in a difficult week. Inevitably, the Covid-19 health crisis has damaged the European economy. On Wednesday, France announced a drop in its GDP of 6% in the first quarter of 2020, a decline seen more since 1945 and synonymous with recession. Germany, the usual locomotive and a good student of Europe, forecast a decline of almost 10% in the second quarter. Across the continent and around the world, the coronavirus is causing disastrous paralysis that heralds an economic crash.

► Read also: Coronavirus: in 2020, world trade could fall by almost a third, according to the WTO

Even within the European Union, there is division over the appropriate response. The most bloodless and the most virtuous countries do not agree on a crucial point: the pooling of debts. Despite 16 hours of discussions, the finance ministers of the 27 failed to find common ground. So, before the Eurogroup is reformed and its members resume their talks on April 9, Christine Lagarde spoke.

" European governments must be side by side "

In the columns of the daily Le Monde , the President of the ECB announces that the crisis caused by the Covid-19 cannot be tackled " using old recipes ". To deal with it, " European governments must be side by side to deploy policies together in the face of a common shock ", insists Christine Lagarde. The former director of the International Monetary Fund warns: “ If all the countries do not recover, the others will suffer. By showing solidarity, you actually serve your own interests. "

► Read also: The "coronabonds", a solution to prevent a new debt crisis in Europe?

Supporting jobs is one of the priorities. " They have never been so threatened since the 1930s, " she notes. As of March 19, the ECB released 750 billion euros to support the economy. In Le Parisien , Christine Lagarde also mentions European banks, " much more solid than they were in 2008 ", thanks to a stricter vigilance. Now for action: “ We are in a period where we must use all of our tools without hesitation. "

No debt cancellation

In this fight that the Europeans must wage " side by side ", the new negotiations of the Eurogroup will show a first encouraging sign. The famous "coronabonds" who tense the nations should not be the subject of a " fixation ", tempers Christine Lagarde, always in the columns of the Parisian . Solidarity, okay, but other means exist. The former Minister of the French Economy advocates equal treatment, without delivering the miracle solution.

► Read also: The "coronabonds", the united tool that breaks Europe

However, Christine Lagarde rejects the idea of ​​canceling the colossal debt contracted. " Europeans will have to reimburse one day, " she told the Parisian . At the microphone of France Inter , she hit the nail on the head: a global cancellation " seems completely unthinkable to her ". This debt will need several years to be paid off. The path will be long and there are many pitfalls to avoid. Finding collective momentum would be a good start.

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• European Union
• ECB
• Christine Lagarde
• Coronavirus

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