The President of the European Central Bank (ECB) Christine Lagarde on Monday warned governments against the risks of a sudden end to their measures to support the economy, put in place to mitigate the impact of the pandemic, pleading for a "
Smooth transition
".
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Faced with the recession caused by the new coronavirus, governments have urgently deployed a panoply of new tools to support the economy (short-time working, deferral of charges, sectoral aid, etc.).
"
My first concern at this stage is that the conduct of policies makes it possible to avoid the cliff-edge effect
", that is to say "
the fact that some of the policies put in place during the pandemic (...) are suddenly stopped
”, declared Ms. Lagarde during a speech at a conference organized by the IMF.
"
We hope that decision-makers will understand and act so that these supports are extended for a certain time, so that the recovery takes hold, and even if the pandemic gradually dies out,
" she said.
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The President of the ECB called for
"a smooth transition
" to other measures designed to support a recovery in activity, as "
new businesses
" are created and the labor market rebounds.
These policies must focus on public investment, education and an effective regulatory environment, she added.