Due to delays in Eurogroup agreement... Lagarde: "Solidarity is Profit, Fiscal Policy Essential"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Christine Lagarde, President of the European Central Bank (ECB), reiterated the need for European Union (EU)-level fiscal policies to prevent the economic damage caused by the novel coronavirus disease (COVID-19). As the Eurogroup, the council of finance ministers from the Eurozone (19 countries using the euro), faced conflicts and difficulties in reaching an agreement on countermeasures, she stated that "solidarity" ultimately benefits everyone.

According to Bloomberg and other sources, President Lagarde wrote in an op-ed published in some European media on the day, "Full support for fiscal and monetary policies is the best way to protect our productivity and employment after COVID-19 passes." She added, "If the problems of all countries are not resolved, someone will suffer," and emphasized, "Solidarity is actually (each country's) private interest."

President Lagarde stressed, "Fiscal policy is essential in this crisis," and said, "Governments must support each other and together come up with the optimal measures to respond to the economic impact." She also noted that the ECB is actively playing a role in providing liquidity, such as household and corporate loans, and will continue to fulfill its price stability mandate and work for European citizens.

Her op-ed came a day after the Eurogroup failed to reach an agreement on countermeasures. Despite 16 hours of discussions the previous day, the Eurogroup could not reach a consensus on economic measures related to COVID-19 due to conflicts among member countries. Additional discussions are scheduled for the 9th.

Member states clashed over the conditions of the approximately 410 billion euro Eurozone bailout and the issuance of joint Eurozone bonds, known as "corona bonds." As the market had anticipated, countries such as France, Italy, and Spain, which argue that the EU should actively inject fiscal resources to combat COVID-19, confronted hawkish countries like Germany and the Netherlands.

This content was produced with the assistance of AI translation services.