The Malta Independent 13 July 2020, Monday

Alfred Sant urges European Central Bank to support euro zone countries hit by Covid-19 pandemic

Friday, 8 May 2020, 11:42 Last update: about 3 months ago

Labour MEP Alfred Sant has urged the European Central Bank to step up its support for countries in the euro zone hit by the Covid-19 pandemic particularly those states which have experienced severe damage on both the health and economic fronts.

During a session of the European Parliament’s Economic and Monetary Affairs Committee held by video conference, Alfred Sant quizzed the Vice-President of the European Central Bank, Luis De Guindos about the policy responses and interventions of the ECB in view of the economic and financial impact of the outbreak.

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Alfred Sant noted that we might still be underestimating the economic and financial damage caused by the pandemic and questioned whether the ECB has formulated worse case scenarios about what is happening and how these would be taken into account.

The Vice-President was asked what geopolitical methodology will the ECB use to determine the different magnitudes of the interventions it will be launching and how the ECB will balance a delicate line between those who need most support and those who need it less.

Alfred Sant stated that countries which in sanitary terms have deployed optimal and successful medical strategies, could for that very reason, now be facing greater economic stress.

In his answers, the Vice President of the ECB said different governments are rapidly going to remove the restrictions and the economic impact of the pandemic will change.  The ECB will be prepared to adjust its strategy according to developments.

He stressed that there is a high level of uncertainty and not all countries have the same fiscal stance. It was difficult to forecast what will happen but economic activity could bounce back in 2021.

During the exchange of views held following the presentation of the ECB’s 2019 Annual Report, Luis De Guindos said that the ECB was determined more than ever to support the euro area economy and was ready to make adjustments to monetary policy measures should it see that the scale of the economic stimulus is falling short of what is needed.

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