European Central Bank President Christine Lagarde called for a “swift, sizeable and symmetrical” spending package to counter the coronavirus crisis in the EU.
Lagarde told an online forum Friday that a common European fiscal response was “desirable” to counter differences among countries in the depth of the pandemic’s fallout.
She also reiterated that the central bank is standing its ground after a German court questioned the legality of its actions.
“The ECB will play its part in line with its mandate. We will do everything necessary within our mandate to support the recovery and we remain undeterred in delivering on our price-stability objective,” she told a European University Institute webinar.
EU Economy Commissioner Paolo Gentiloni told the same event that the entire European project was “at stake” without a strong, common fiscal response.
Eurozone finance ministers are due to sign off today on emergency credit lines for governments, part of an initial €540 billion stimulus package. Gentiloni’s European Commission meanwhile is drafting a proposal for an additional EU-wide recovery fund.
The ECB estimates that euro-area governments may need to boost support to the economy to more than 10 percent of annual gross domestic product.
Lagarde said this would require €1 trillion to €1.5 trillion of additional debt issuance in 2020 alone.
The Frenchwoman also called the crisis an opportunity for Europeans to pull together. She described the recovery as “our generation’s ‘Schuman moment’” — referring to the 70th anniversary, on Saturday, of French foreign minister Robert Schuman’s proposal for a community that led to today’s EU.