Economy

European Central Bank Chief Lagarde Pledges Boost For EU Economy If COVID-19 Escalates

European Union flag

As Europe braces for a dreaded second wave of COVID-19, European Central Bank President Christine Lagarde is pledging to ride to the rescue with a major economic stimulus package if it proves necessary, CNBC reported.

Speaking on an IMF World Bank panel, Lagarde told CNBC’s Geoff Cutmore that the ECB is prepared to draw upon “the many weapons we have available,” including interest rates, forward guidance and asset purchase programs.

“We are seeing maybe a second wave on the horizon or hitting the coastline of Europe and we better make sure that all the arsenal that we have available is actually dealing with the situation by adopting the right policies,” Lagarde said, adding that an increase in fiscal spending was “being considered” by many member states as they present their budgets.

Lagarde’s comments come as a second wave of the deadly coronavirus appears to be taking shape in Europe, with rising case numbers having triggered the declaration of a public health state of emergency in France.

The ECB chief’s comments also came after she also warned, at an IMF conference earlier in the day, of rising debt levels, though Lagarde said she believes banks on the continent have adequate reserves to absorb losses, CNBC noted.

Meanwhile, Germany and the United Kingdom have both rolled out new efforts to combat the spread of the deadly virus in just the last 24 hours as hospitalizations rise.

Overall, more than 251,000 people across Europe have died as a result of COVID-19, with more than 7.4 million cases of infection.

The eurozone is on track to see an 8.3 percent drop in growth this year, just about double the rate for the global economy, according to the International Monetary Fund.

“We are still in the long grass for the moment and there is still a lot of work to be done, especially as from this corner of the world in Europe, we are seeing recurrences of contagion,” Lagarde told CNBC’s Cutmore.

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