«Debt forgiveness due to the pandemic is unthinkable, as it would constitute a violation of the EU Treaty, which strictly prohibits monetary financing of member states,» said the president of the European Central Bank in an interview. Christine Lagarde, responding indirectly to a related An appeal by 100 economists, in order to facilitate social, economic, and ecological reconstruction.
«This rule is one of the pillars of the euro’s foundation,» Ms. Lagarde explained to the French weekly newspaper. «If the energy spent on asking the ECB to cancel debt were devoted instead to a dialogue on how to put that debt to good use, that would be much more useful! What will public spending be used for? In which sectors of the future will we invest? »That is what really matters today,” added the former French Minister of Economy and Finance and later Managing Director of the International Monetary Fund, who took over as President of the ECB in September 2019 (1).
More than 100 economists They issued an appeal the day before yesterday, Friday to write off public debt where withholds η ECB, to facilitate social and ecological recovery following the novel coronavirus pandemic.
«We owe ourselves 25% of our debt, and if we pay off that amount, we’ll have to find it elsewhere—either by borrowing to refinance it instead of investing, or by raising taxes, or by cutting spending,» explained the economists, among them fifty French nationals, including Thomas Piketty, Belgian former minister Paul Magnette, and Hungarian former European Commissioner László Andor.
«All eurozone countries will emerge from this crisis with higher levels of debt,» Ms. Lagarde said in an interview with the JDD. However, «there is no doubt that they will be able to pay it off. The debt is manageable in the long term. Investments in sectors critical to the future will lead to stronger growth.».
«The recovery will create jobs, and thus lead to the federalization of the economy. We will move toward a different economy—one that is more digital, greener, and more committed to combating climate change and protecting biodiversity,» said Christine Lagarde.
Immediately, predicted that «2021 will be a year of recovery. »The economic recovery has been delayed, but it has not been derailed. Clearly, it is eagerly awaited.« However, »we are not yet safe from risks that remain unknown,« and »we will not return to the level of economic activity recorded before the pandemic began until mid-2022,” he warned.
