The European Central Bank (ECB) following the meeting on Thursday announced the launch of an additional lending program to support liquidity. He is also willing to increase the amount of asset purchases, if necessary. Meanwhile, the head of the ECB, Christine Lagarde, predicts the fall of Euro area GDP this year by 5 to 12%, Eurostat for January—March have already reported on the contraction of the economy by 3.8% QoQ.The ECB kept its benchmark interest rate for loans at zero level, Deposit rate — at the level of minus 0.5%, the rate on margin loans, as before, will amount to 0.25 percent, the Bank said. It noted that rates will remain at current level or will be lower as long as inflation in the Eurozone closer to target.Buying will continue until “the crisis caused by the pandemic coronavirus, comes to an end, and in any case before the end of the year,” said the Bank. Also announced the launch of a new emergency allocation of unearmarked banks long-term loans in a pandemic. The program shall maintain the amount of liquidity in the financial system and contribute to ensuring the smooth functioning of money markets. The regulator will begin to implement this program in may 2020.The head of the ECB, Christine Lagarde after the meeting said that the regulator is ready to do everything to support the economy, and gave a forecast that Eurozone GDP could fall this year by 5-12%. Meanwhile, according to preliminary estimates by Eurostat, in the first quarter, the economy of the currency bloc fell by a record 3.8% quarter to quarter even in the midst of financial crisis (in the first quarter of 2009), the decline was 3.1%. According to the national stategist, Italian GDP fell by 4.7%, France 5.8%, Spain 5.2%. The Euler Hermes rating, in the April—June quarter the depth of the recession can grow up to 17% (for the whole year is expected to decline by 9.3%). Consumption and investment will remain weak until a vaccine or effective treatment, experts say.Tatiana Edovina
