The coronavirus-hit eurozone economy probably will not return to its pre-pandemic levels until next year at the earliest, the European Central Bank’s chief economist told El Pais newspaper, adding that the ECB was prepared to tweak its tools if needed.
“From today’s perspective, it looks in any case unlikely that economic activity will return to its pre-crisis level before 2021, if not later,” Philip Lane said in the interview published on the ECB’s website.
Lane said the ECB was constantly monitoring the situation and was ready to adjust all of its instruments if that proved necessary. He added that the ECB’s Pandemic Emergency Purchase Program, also known as PEPP, could be adjusted.
He said the ECB was analysing the situation ahead of the upcoming June meeting, adding: “If we see that financial conditions are too tight, or the pressure on individual bond markets is not reflecting economic fundamentals, we can adjust the size or duration of our purchases, which we can anyway allocate flexibly over time and market segments.” [Reuters]