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For Lagarde (ECB), the cancellation of the Covid-19 debt is "unthinkable"

2021-02-07T06:25:06.910Z


More than 100 economists had launched Friday, February 5, a call to cancel the public debts held by the ECB to facilitate social and ecological reconstruction after the Covid-19 pandemic.


The cancellation of the Covid-19 debt is "

unthinkable

" and would be "

a violation of the European treaty which strictly prohibits the monetary financing of States

", underlined in

the Journal du Dimanche

the President of the European Central Bank (ECB) Christine Lagarde .

Read also: The Covid increases the global public debt to almost 100% of the GDP

"

This rule is one of the fundamental pillars of the euro

", explained Christine Lagarde in the French weekly.

"

If the energy spent demanding the ECB's debt cancellation were devoted to a debate on the use of this debt, it would be much more useful!"

What will public spending be allocated to?

In which sectors of the future to invest?

This is the essential subject today.

"

More than 100 economists on Friday launched a call to cancel public debts held by the ECB to facilitate social and ecological reconstruction after the Covid-19 pandemic.

Read also: More than 100 economists call for the cancellation of public debts held by the ECB

"

We owe 25% of our debt to ourselves and if we pay that back, we'll have to find it elsewhere, either by borrowing again to roll over the debt instead of borrowing to invest, or by raising taxes, or by lowering expenditure

”, explain these economists, including 50 French, including Thomas Piketty (Paris School of Economics), former Belgian Minister Paul Magnette and former Hungarian European Commissioner Andor Lazlo.

"

All the countries of the euro zone will emerge from this crisis with high debt levels,

" said Christine Lagarde in the JDD.

But “

there is no doubt that they will manage to repay it.

Debts are managed over the long term.

Investments in sectors that are crucial for the future will generate stronger growth

”.

The recovery will create jobs, and therefore federate.

We are moving towards another economy, more digital, greener, more committed to climate change and to maintaining biodiversity,

”she said.

In the immediate future, she believes that “

2021 will be a year of recovery.

The economic recovery has been delayed, but not undermined.

It is obviously eagerly awaited

”.

However, "

we are not immune from still unknown risks

", and "

we will not return to the levels of economic activity before the pandemic before mid-2022

", she warned.

Source: lefigaro

All business articles on 2021-02-07

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