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IMF urges Europe to provide more monetary and fiscal support to prevent further damage to the eurozone economy

IMF urges Europe to provide more monetary and fiscal support to prevent further damage to the eurozone economy

Managing director of the International Monetary Fund (IMF), Kristalina Georgieva (L) and European Commission President Ursula Von der Leyen (R)
Andadolu Agency/Getty Images




The eurozone economy is going to need more support from both the central bank and national governments to avoid a deeper recession, the International Monetary Fund said.




A second wave of the COVID-19 virus and the lockdowns it has brought across much of Europe means economic growth in the region is likely to deteriorate faster than expected, the fund said.




"National fiscal policies have been a critical defense against the pandemic, markedly dampening its economic and social impact by providing critical lifelines for workers and firms," the IMF said.




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The eurozone economy is going to need more monetary and fiscal support to avoid further damage from the coronavirus pandemic, the International Monetary Fund said on Monday.The United States has the highest individual death toll and infection rate from COVID-19, but Europe as a whole is not far behind, with over a quarter of a million dead from the virus. A second wave of the disease has forced a number of major eurozone economies into total or partial lockdowns, including Germany, France, Italy and Spain. Even with the prospect of a successful vaccine in coming months, the economic recovery remains fragile and could take longer than the IMF forecast a month ago."Rising infections and re-imposed lockdowns have damaged confidence and lowered mobility, and the better-than-expected growth outturn in 2020Q3 will likely be followed by weaker activity in 2020Q4. Unless pandemic dynamics change significantly in the coming months, growth in 2021Q1 is set to be weaker than forecast in the October 2020 World Economic Outlook," the IMF said in a report on the outlook for the eurozone economy.
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