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“Recovery is successful and inclusive” Furthermore, the ECB president argues, “the additional resources of the package can facilitate expansionary fiscal policies, especially in euro zone countries with limited fiscal space.” For Lagarde, “public investment and reforms, especially if they are oriented towards medium and long-term challenges such as environmental sustainability and digitization, can be a bridge towards a successful and inclusive recovery. We should not think of the two separately: Combining reforms with investment-led stimulus have the potential to further boost growth. Together, they should shape the future of our economies and ensure they adapt to the ‘new normal’ that will materialize once the peak of the pandemic. “
“Monetary and fiscal policies can be mutually reinforcing” The President of the ECB stresses that the response to the crisis has so far demonstrated how “monetary policy and fiscal policy can be mutually reinforcing in the current circumstances. It is essential that monetary policy ensures favorable financing conditions for the entire economy. Same time”. Fiscal policy has a primary role to play in supporting demand in the short and medium term, fostering confidence and increasing the growth potential of our economies. Fiscal policy plays this role for three reasons: the stimulus must come quickly; an important sector dimension for which monetary policy is not the appropriate tool, and some of the policy tools, such as loan guarantees, are inherently fiscal. ”
“The ECB cannot cancel debts, it would go against the EU Treaties” Responding to a question from Lega MEP Marco Zanni about the possibility of the ECB to cancel the debts contracted with European nations in this difficult period of crisis, Lagarde affirms: “I always read with interest everything that the representatives of the EU Parliament say and especially the presidents, my answer “to the idea of Sassoli” is very brief: everything that goes in that direction goes against the Treaties, there is article 103 that prohibits this type of approach and I respect the Treaties “.
Lagarde quotes Goethe: “Everything is based on perseverance” Finally, Lagarde quotes the German poet and playwright Johann Wolfgang von Goethe to close his speech before the Committee on Economic and Monetary Affairs of the European Parliament and invite countries to persevere in pursuing policies that reduce the consequences of the coronavirus pandemic. “So far, the European response to the crisis has not only been impressive, it has also been very effective. As we enter the second phase of the crisis, we must persevere and continue with the same commitment to continue to deliver results for European citizens. Europeans – in fact, almost all according to the latest Eurobarometer survey – are asking us for this action ”, said the Eurotower leader. “Let us make sure that the policies we are defining allow us to get there. As Johann Wolfgang von Goethe once said:” When it comes to ideas, everything depends on enthusiasm; in the real world everything is based on perseverance. ”
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