ECB Governing Council member Francois Villeroy de Galhau said the European economic policy was permanently changed by the coronavirus pandemic. Firstly, the “exceptional, provisional weapons will be long-lasting”. Secondly, “the non-conventional becomes the quasi-conventional. The exceptional measures like negative interest rates, quantitative easing and long-term bank loans are here to stay.
The Bank of France Governor also said separately that things are going “at least as well as we forecast at the start of June, and even a bit better” in France. Economic contraction in 2020 may not be as sharp as the -10% projected. “If households have more confidence and dip into savings to feed their consumption, the recovery could be quicker and we could get to pre-covid levels of activity at the end of 2021,” Villeroy said.
