Isabel Schnabel: Interview with To Vima

INTERVIEW

Interview with To Vima

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Angelos Athanasopoulos and published on 4 April 2020

• 4 April 2020 The ECB recently decided to unleash its firepower once more to protect the euro area economy.
• Over the past few weeks, the outlook for the economy deteriorated sharply as countries had to intensify containment measures, dampening both production and consumption.
• We also observed a sharp tightening of financial conditions at a time when the economy needed support.
• This helps stabilise financial markets, and contributes to much more favourable financing conditions, not least in Greece, where interest rate spreads have dropped markedly.
• Would you say that it is different from a typical monetary quantitative easing (QE) programme?
• We expect it to run until we judge that the current crisis is over, but at least until the end of the year.
• How do you respond to those who say that the ECB should not raise the issue limit of 33% when buying bonds?
• That being said, there is clearly a need to provide European-level support to those euro area countries hit most by the crisis.
• This is not just a question of European solidarity, but also makes sense from an economic standpoint.
• Mitigating the negative economic effects of the crisis in each Member State and supporting the recovery afterwards makes the whole of Europe stronger.
• There are other instruments that could be used, like an EU rescue fund or measures involving the ESM or the European Investment Bank.