‘Deep recession is inevitable’: ex-ECB chief Mario Draghi calls for huge stimulus to prevent a coronavirus depression
- European economies will shrink and risk a prolonged decline unless governments plow cash into their economies to combat the fallout from the novel coronavirus, Mario Draghi said in a Financial Times column this week.
- “The challenge we face is how to act with sufficient strength and speed to prevent the recession from morphing into a prolonged depression, made deeper by a plethora of defaults leaving irreversible damage,” the former European Central Bank president said.
- Draghi argued governments should compensate businesses that lose income or take on debt to weather the pandemic.
- Countries risk “permanently lower employment and capacity,” he said, unless they flood their economies with liquidity using bond markets, banks, and even post offices.
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The novel coronavirus will choke growth across Europe and could permanently shrink economies unless governments splash their cash, Mario Draghi, the former European Central Bank president, said in a Financial Times column this week.
“The coronavirus pandemic is a human tragedy of potentially biblical proportions,” Draghi said. Ongoing national lockdowns, intended to reduce transmission and prevent healthcare systems from being overwhelmed, come with “a huge and unavoidable economic cost,” he added.
Companies are laying off workers …continued .
[Source: Business Insider]