Euro area

While there has been some rebound in economic activity, the level of economic slack remains extraordinarily high and the outlook highly uncertain, writes Chief Economist Philip R. Lane. Progress in containing the virus will be central in determining the size and speed of the recovery.

Learning the lessons of the past, Europe has moved towards a new model for dealing with crises, writes President Christine Lagarde in The ECB Blog. We have shown that we can act quickly, adapt our institutions and lay the groundwork for forging a new Europe.

Our crisis measures respond to the worst economic crisis in the post-war period, says Executive Board member Isabel Schnabel. They are necessary, suitable and proportionate and benefit all European citizens.

Two main factors called for further policy action, writes Chief Economist Philip R. Lane. First, the pandemic-related negative shock to inflation poses a threat to medium-term price stability. Second, while conditions in financial markets have stabilised substantially, the situation remains fragile.

In an ECB Blog post, Chief Economist Philip R. Lane discusses the macroeconomic scenarios developed by ECB staff to illustrate the possible impact of the pandemic. He also explains current monetary policy and outlines the approach to setting the future course of monetary policy.

Our response to coronavirus is designed to reach the firms and families facing a steep loss of income and rising anxiety about the future, writes President Christine Lagarde. She adds that full alignment of fiscal and monetary policies is the best way to protect productive capacity and employment.

We will not tolerate any risks to the smooth transmission of our monetary policy in all jurisdictions of the euro area, Executive Board member Philip R. Lane writes in the inaugural post of The ECB Blog. The post explains the analytical framework underlying the March monetary policy measures.