MNI POLICY: Europe Has Passed Covid-19 Test - ECB's Lagarde

By Luke Heighton

     FRANKFURT (MNI) - Europe's response to the coronavirus has "passed the

test," European Central Bank president Christine Lagarde claimed Thursday, as

she hailed the "powerful change to the structure of the Union" created by the

Next GenerationEU fund.

     The funding package agreed in Brussels on Tuesday means national measures

have been complemented by a "targeted and forceful" fiscal response, Lagarde

wrote in an ECB blog post.

     "Crucially," she added, "monetary and fiscal policies have reinforced each

other [...] Now, policies are fully aligned in securing the fastest possible

recovery, which also underpins medium-term price stability."

     In so doing, she wrote, the EU has "substantially exceeded" its response to

the sovereign debt crisis, at the same time as it has "broadened the boundaries

of what is possible should we be struck by such dramatic shocks again."

     "Indeed, even though NGEU is temporary," she continued, "the potential to

activate such tools in future crises is already a powerful change to the

structure of the Union."

--MNI Frankfurt Bureau; +49-69-720-146; email: luke.heighton@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

[TOPICS: M$X$$$,M$$EC$]