Washington

Virus-hit European economy likely to get stimulus shot – Washington, District of Columbia

Washington, District of Columbia 2020-12-10 07:49:38 –

Frankfurt, Germany (AP) —The European Central Bank is expected to unleash more than € 5 trillion ($ 600 billion) …

Frankfurt, Germany (AP) —The European Central Bank is expected to unleash more than € 5 trillion ($ 600 billion) of stimulus on Thursday to help businesses, workers and governments through the winter wave of coronavirus. I am.

Bank Governor Christine Lagarde has shown very clearly that action is coming, and the boards of the bank’s 25 member states have used this conference to euro.

Analysts believe the central bank will boost its current € 1.35 trillion ($ 1.64 trillion) pandemic emergency bond purchase program by more than € 500 billion, extending it from its current earliest end date of mid-2021 to the end or mid-2021. I am. 2022.

Eurozone monetary authorities have also added ultra-cheap, long-term loans to banks, the main source of reserves for eurozone companies, to prevent companies from going bankrupt or shrinking because of too high credit. Can be You can not use it. Some long-term loans are currently offered at negative interest rates, and in fact they are paying the bank on the condition that they continue to lend to the bank.

Mr Lagard said policymakers, including central banks, governments and EU agencies, need to continue to support the economy to close the gap until the vaccine helps resume normal economic activity. She cautioned that it was too early to celebrate recovery when the vaccine was still in its very early stages of deployment. The UK has begun vaccination of vulnerable older people, but major trading partners the EU and the United States are working on final approval before launching the campaign.

In his November 11 speech, Lagarde needs help to ensure that viable business owners don’t give up before recovery arrives. “Companies that have survived by increasing borrowing may decide that staying open is no longer meaningful to their business,” she said.

The ECB’s stimulus is helping governments spending a lot of money on helping businesses and workers, resulting in a surge in government deficits and borrowing needs. Governments are rolling out support such as temporary dismissal programs that pay workers’ salaries to avoid permanent temporary dismissals, suspension of some taxes such as German VAT, cheap loans and credit guarantees. I am.

At the European Union level, the government is proposing to participate in joint borrowing to fund a € 750 billion recovery fund to support the fight against digital innovation and climate change. The money will begin to flow next year, but the final approval of the program is a dispute between the conservative nationalist governments of Hungary and Poland over the conditions associated with the money requiring recipients to comply with EU democratic standards. Was postponed by

ECB bond purchases help lower long-term interest rates and keep all borrowings affordable. The stimulus also helped to guarantee the eurozone against the recurring debt crisis of 2010-2012 when rising borrowing costs could disrupt the monetary union.

The Federal Reserve Board of Governors is also buying bonds, but government spending has recently been the focus of attention as Republicans and Democrats vie for another round of stimulus in Congress. The Federal Reserve Board of Governors will hold their next policy meeting on December 15-16. Some Fed officials have emphasized the need for Congress to act and have indicated that if Congressmen do not provide further support, they may change bond purchases to better support the economy. ..

Copyright © 2020 AP communication. all rights reserved. This material may not be published, broadcast, written, or redistributed.

Virus-hit European economy likely to get stimulus shot Source link Virus-hit European economy likely to get stimulus shot

Back to top button