“ECB asset purchases could top €1 trillion but probably still won’t be enough to stop the economic damage

Following the European Central Bank’s decision to hold rates, please see below commentary from Dr. Kerstin Braun, President of Stenn Group, an international provider of trade finance headquartered in London and New York, for any pieces you are writing.

Dr. Kerstin Braun, President of Stenn Group, a global trade finance provider, comments on the European Central Bank’s decision to hold rates: “Like the Bank of England and the US Federal Reserve, the European Central Bank has taken unprecedented emergency actions to protect economies and markets amidst the Covid-19 pandemic. Their actions have calmed nerves and steadied financial markets. Christine Lagarde should be applauded for stepping up at a time when politicians hesitate over fiscal relief.

“Crises can exacerbate family squabbles, and the EU is not immune to disagreement over the extent of the ECB’s actions. With the Eurozone expected to shrink by as much as 15% this year, ECB asset purchases could top €1 trillion, potentially crossing a thorny threshold regarding the amount of debt it can take on from each nation. Even so, this amount, along with the €500 million pledge by governments for business and household liquidity, probably won’t be enough to stop the economic damage from the pandemic. Getting more relief will undoubtedly cause a familiar family feud between the rich and poor country members. However, letting the weaker economies implode would be much worse for the EU in the long run.”