European Central Bank head, Christine Lagarde, told European Union leaders on Friday that their economy was in a “dramatic fall” and called on the bloc to act to spearhead revival, diplomatic sources and officials said.
Lagarde addressed EU leaders meeting via video conference to wrangle over how to engineer a recovery from the crisis.
“[The] EU economy is experiencing a dramatic fall,” she told the gathering, according to the sources.
She said the eurozone economy was headed for a “sharp decline” of some 13% in the second quarter and reiterated the bank's forecasts for a GDP drop of 8.7% in 2020 and a rebound of 5.2% in 2021.
She said the full effects of the EU’s worst economic downturn have not yet manifested themselves fully on the labor market and that the eurozone’s unemployment rate could hit 10%.
She called on the leaders to agree on their recovery plan swiftly to spearhead economic revival and said financial markets were relatively calm due to expectations that the bloc would act to show that “the EU is back” in action, the sources said. [Reuters]