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May 07, 2020 The European Central Bank is determined to support the eurozone economy hit by the recession, but "we need a strong fiscal response and a political agreement on the tools to be put in place". The ECB vice-president Luis de Guindos says it, in the aftermath of the Commission's spring forecast which confirmed the deep recession of the European economy and a few days after the ruling by the German Constitutional Court on the quantitative easing of the Institute of Frankfurt."We are more determined than ever to guarantee financial support conditions in all sectors and countries to allow this unprecedented shock to be absorbed - said de Guindos during a hearing in the Econ committee in the European Parliament - and we are ready to make further adjustments to our monetary policy measures should we see that the size of the stimulus is not up to what is needed, "he added.
However, according to De Guindos, a greater role of fiscal policy is needed in the fight against the recession: "It is essential that the fiscal response to this crisis is strong enough, in all parts of the euro area", "an agreement is needed politician to build the appropriate tools for this common response, "he concluded.
Double or triple impact of the virus on GDP
In the next quarter, the impact of the coronavirus pandemic crisis on the euro area economy could be "double or triple" compared to that recorded in the first quarter, says the vice president of the ECB, reporting to the European Parliament.
"The only level of certainty that we have is the impact" of the crisis "on the first quarter - said De Guindos - and that is a drop of 4%: but according to our forecasts it could have a double or triple impact compared to the first This will also depend on lifting the restrictions of the various governments and the impact of the pandemic on the various countries. The faster relaxation of the restrictions I imagine could lead to a recovery but at the moment we do not know, nobody knows. we have is very similar to that of the Commission. The uncertainty is greatest and also translates into the forecasts for economic activity and the level of inflation, "he added.
Some countries most affected, European response needed
To face the economic crisis linked to the pandemic "we are asking for a pan-European response: despite the crisis being symmetrical, the consequences and impact will be asymmetric and the national responses cannot be equally shared between the various countries. this serves a pan-European response, "says Luis De Guindos.
"We operate under EU Court jurisdiction"
The European Central Bank "is independent of governments and lobbies" and operates "under the jurisdiction of the EU Court of Justice", De Guindos referring to the decision of the German Federal Constitutional Court on the quantitative easing program of the Frankfurt Institute. "We are a European institution and operate under the jurisdiction of the EU Court of Justice," said De Guindos during a hearing in the Econ committee of the European Parliament.