The vice president of the European Central Bank (ECB), Luis de Guindos, has indicated that the entity faces a "high uncertainty with inflation", which he expects to continue to decline in 2020 with a rebound in 2021. "The main cause is the" weak demand closely linked to the evolution of the pandemic and low oil prices, "he explained, and cited other causes such as the lowering of VAT in Germany, which has led to an unprecedented debacle from mid-March this year to April.
He also indicated that "there are also opposing supply effects", such as "global production chains are going to be increasingly regional." However, this panorama will lead to an "uncertain, incomplete and uneven recovery by sector and by country", very marked by the evolution of the pandemic and the arrival of a vaccine against Covid.
In these terms he has expressed himself during his appearance in the summer course 'The financial system and the Covid 19 crisis. Challenges and commitments', organized by the Association of Economic Information Journalists (APIE) at the Menéndez Pelayo International University, during which has also reviewed the actions of the central bank during the pandemic. Thus, it has taken out the response of economic policy with "unparalleled speed and intensity, nothing to do with the crisis of 2012".
It has positively assessed all the actions taken, both from the monetary supervisor and fiscal policy, by individual countries and the euro area as a whole, which it has been "fast and intense". For its part, it has valued positively that the objectives set with the gargantuan asset purchase package of 1.35 trillion have been achieved, added to the quantitative expansion of 20,000 per month and the additional 120,000 million approved at the beginning of the pandemic: "Keep target inflation and avoid market fragmentation and avoid credit contraction, given the magnitude of the crisis ".
In the central banker's opinion, however, after this recovery, which is expected to be asymmetrical by the ECB, defects will remain that will persist in the long term. "Before the Covid, we already warned that there were very high asset valuation problems, leverage of the private and public sectors and problems in banks and investment funds," he said. And he stressed that the eurozone will leave the pandemic behind with a very high debt, derived from a "significant jump in the debt / GDP ratio."
"Taking into account the expansionary fiscal policies we will find ourselves in Europe with a ratio that has jumped 15 or 20 points", a situation that is a" long-term legacy as a result of the pandemic, the measures taken and the contraction of GDP. "In the corporate sector, Guindos has warned that indebtedness" is also going to grow because the income ", however, has highlighted some measures such as ERTE that have alleviated costs for companies.