Coronavirus, the position of Mario Draghi: “We are european citizens”

Coronavirus, Mario Draghi spoke of the current health emergency by emphasizing the importance of acting immediately.

The prevoius President of European Central Bank, Mario Draghi, has spoken about the current health emergency during an interview to the Financial Times.

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Coronavirus, the position of Mario Draghi

The most important element that Draghi has underlined is the importance to act immediately, because the waste of time could mean a fall into a recession from which it could be very difficult to get out.

He has spoken about “a tragedy of biblical proportions” because of the deaths of human beings and also because of economic consequences. The increase of public debt is unavoidable but it is important to avert a permanent destruction of productivity and of fiscal capacity that could be more dangerous for the entire economic system. Moreover, high level of debt will become a permanent economic characteristic among the countries and the private debt will be deleted.

It is necessary to act immediately because hesitation costs could have unprecedented and really harmful consequences. He has praised the actions taken so far, defining them as “courageous and necessary”. But they are not sufficient. Every specific country has to use its resourses in order to defend and protect the citizens and the entire economic asset from that shocks for which the private sectors are not responsible. Moreover, it is also necessary that there will be a common action and a common project, because no country will be able to face and overcome this huge crisis alone. “We are european citizens and we are called to give each other support”, Draghi said.

The coutries should act to prevent people from losing their jobs and to avoid a reduction in occupation levels. With an increase of unemployment, the families will not find easily their financial balance. For this reason Mario Draghi supports the idea that the postponing of taxes will not give results in the long term period, so he believes that the right action is the increase of liquidity in the entire system.

The motto is always “whatever it takes”, used during one of his speech in 2012, with which the quantitative easing policy is adopted (approach that is different from that used by Christine Lagarde, the actual president of ECB). On the other hand, the banks has to help by “lending money at no cost to businesses”. So speed and resiliency are the key words of Mario Draghi’s approach to Covid-19 emercency.