Lagarde: Each month of lockdown costs 2% to 3% of GDP

European Central Bank President Christine Lagarde said on Thursday that each month of lockdown costs around 2% to 3% of GDP.

  • “The longer the confinement, the more serious impact will be” said Lagarde adding that a cancellation of debts from the crisis seems totally unthinkable to her.

Lagarde told Le Parisien that vulnerable small companies must be helped but that if fiscal tightening happens too fast, it could be a trap.

She noted that there may be some other forms of European solidarity. As example, she mentioned mutualised spending from a shared budget or a reconstruction fund.

  • “We shouldn’t get fixated on coronabonds. Things take time in Europe,” stated Lagarde adding that any tightening of financing conditions will not be tolerated.