The ECB: 'GDP record crash. Ready to do what it takes

The pandemic crisis, which has stopped much of the economic activity, will cause a fall in the GDP of the Eurzona of between -5 and -12% : "with the gradual removal of the containment measures, there will be a recovery in economic activity, the speed and extent of which, however, remain highly uncertain ". The ECB writes it in the Economic Bulletin. 

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Debt purchases with the pandemic emergency program (PEPP) "will continue to be carried out flexibly over time" and "until the Governing Council has deemed the critical phase related to the coronavirus to be concluded". The ECB writes it. The Council "reiterates its utmost commitment to do whatever is necessaryas part of its mandate to support all euro area citizens in this time of extreme difficulty. "

In the first quarter of 2020, affected only partially by the spread of the virus, the GDP of the Eurozone marked -3, 8% and indicators and short-term surveys indicate "an unprecedented contraction." The April data suggest that "this effect will probably be even more serious in the second quarter. 

" "The deterioration in consumption indicators is unprecedented" : ECB on the effects of the pandemic and the lockdowns on the economic activity of the Eurozone. "The shock caused by COVID-19 - writes the ECB in the Economic Bulletin - has produced a direct effect through the rationing of different expenditure components. Indirect effects should materialize through the impact on income, wealth and access to credit. In addition, pent-up demand can have a positive impact once containment measures are revoked. The medium-term impact on private consumption depends on the duration of the lockdowns, the pace of easing of measures, changes in household behavior and the effectiveness of public policies. "

Ft, necessary infringement procedure against Germany  -" The EU must act against the threat raised by the German court. "The Financial Times writes in an unsigned editorial on page 16 that argues for the need to start an infringement procedure against Berlin. The German Constitutional Court's ruling last week, which questioned the legitimacy of the purchase of government bonds by the ECB, it puts "the whole EU legal system at risk", it reads. The editorial underlines that "the German judges have chosen to ignore the obligations of the "Union treaty and the sentence is equivalent to" a unilateral declaration of constitutional independence from the EU legal order ". The danger would also be encouragement or to other countries to challenge the EU Court. Poland, for example, immediately welcomed the German decision. FT therefore suggests starting an infringement procedure against both countries. "The credibility" of the EU Commission "is at risk" but, he warns, there is a risk of growing "a Eurosceptic sentiment".