ECB’s de Cos: Must Continue to Help Recovery Via Favourable Financing Conditions

28 June 2021

By David Barwick – FRANKFURT (Econostream) – The European Central Bank must continue to facilitate a sustainable economic recovery by ensuring that financing conditions remain favourable, ECB Governing Council member Pablo Hernández de Cos said Monday.

Speaking at the sixth Conference of Mediterranean Central Banks in his capacity of Governor of Banco de España, de Cos said, ‘In a setting of high uncertainty and a still-fragile economic situation, monetary policies need to continue contributing to maintaining favourable financing conditions that allow the recovery to take firm root.’

Immunity against Covid-19 has to be global before the crisis will be over, he said. With poorer countries less able to cope with the pandemic or support the return to economic growth, tightening international financial conditions would harm their economies more, leading to a k-shaped recovery and lower global growth in the end, he said.

‘The road ahead will not be easy’, he continued, citing after-effects of the pandemic-related crisis and structural challenges such as ageing populations and climate change.

Lessons from the crisis include the need for fast, powerful and extensive policy responses to head off worse outcomes, he said.

‘In addition, it is worth emphasising the complementarity of the monetary policy measures and those adopted both by fiscal and by prudential authorities, which have significantly reinforced each other’, he added.