Need more “ambition” – it’s more help to the economy of those deployed and programmed – to face an unprecedented crisis. The recall comes from the Italian member of the board of the European Central Bank, Fabio Panetta. The damage to the economic fabric inflicted by the pandemic “is greater than we see now”, explained Panetta, member of the Executive Committee of the ECB, in an interview with the Spanish newspaper The country. The answer must first of all be the use of the tools that the European Union has equipped itself against the pandemic shock, but more could be needed. “We must make the 750 billion euro EU Recovery tool operational” and “we should evaluate whether provide more fiscal support to get demand back to its potential faster, ”said Panetta.
The knot of inflation: if it does not rise, it is bad
Furthermore, for the ECB, faced with inflation still far from the 2% target, waiting risks being “even more expensive”. “We have room for maneuver – explains the former director general of the Bank of Italy – because we only used a part of the 1.85 billion” of the Pepp. “But if we spend this money and we’re still below target, then we’ll have to do more.”
Damage to the economy is greater than it appears
Panetta’s message is simple and direct: «In general, it would not be wise to bet on a quick recovery. There are risks that can prevent the planned improvements from being implemented. And even if we manage to get out of the pandemic soon, we will realize that the damage to the economy is greater than what we see now, ”he said in the interview. «Nothing prevents the euro zone from having a robust recovery – he observed – but for this the economy must be supported with the appropriate level of monetary and fiscal stimulus. Prudence tells us that it is better to inject too many stimuli than not be up to it ».