The ECB is optimistic

John Thys Agence France-Presse
The president of the european central Bank, Christine Lagarde

The “worst” of the economic crisis caused by the epidemic of coronavirus in the euro zone is ” probably past “, said Friday the president of the european central Bank, Christine Lagarde.

This is the first time in months that the institute’s monetary optimism, even cautious, about the issue. The French, who was speaking in the context of a virtual forum, however, insisted on the fact that the recovery will be “incomplete” and “unequal,” and that it will “transform” the economy.

His optimism contrasts with the gloomy picture drawn Thursday by the international monetary Fund, which sees in particular the countries of the euro zone to suffer a severe recession this year (-10,2 %), a direct consequence of the paralysis of the economy to contain lapandémie of COVID-19 that led to the plane substantially its forecasts.

In Europe, a special summit bringing together physically the dirigeantsdes the 27 countries of the EU, will be held in Brussels on 17 and 18 July in an attempt to find an agreement on the recovery plan, massive of the european economy, by providing for the establishment of a fund raise of € 750 billion funded by massive borrowing. “I don’t think they will arrive at an agreement” as early as mid-July, warned Christine Lagarde, which provides for “intense negotiations” commit and a ” process to continue “.

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A meeting of preparation is planned for Monday in Germany, where chancellor Angela Merkel will host the president of france, Emmanuel Macron, near Berlin, for their first reunion since the beginning of the crisis of the sars coronavirus. The menu of their discussions included the future EU budget and the draft recovery plan, which was largely launched by the franco-German couple.

A big obstacle to overcome in the discussions on the recovery plan, the EU is the reluctance of the four so-called “frugal” Countries — the netherlands, Austria, Sweden, Denmark, very reserved with respect to this plan, which will benefit primarily the countries of the South, the most affected by the pandemic.

But “what is very special is that, for once, the monetary and fiscal policies have worked hand-in-hand” to curb the economic impact of the virus, welcomed the former boss of the IMF. In the wake of the crisis, the economy will have changed, “the airlines, hotels and the leisure sector” develops in a ” different format “, and that “new industries will emerge,” says Ms Lagarde.

Moreover, the growth of credits granted by banks of the euro area private sector continued at a high pace in may (+5.3 percent, after 4.9% in April), driven by loans to companies (+7.3 per cent) in search of liquidity in the face of the economic crisis, according to figures published in parallel on Friday by the ECB.

By contrast, the growth of loans to households continued to grow at a pace little support, to 3 %, as in April.

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