ECB’s Lane Says Euro-Area Recovery Heavily Reliant on Fiscal Aid

European Central Bank Chief Economist Philip Lane said the euro area’s recovery from the pandemic is heavily dependent on fiscal policy, in a signal to governments not to delay their joint stimulus or pull back national support too soon.

“It is essential that fiscal policy counters the pandemic shock to incomes and the productive capacity of firms, ensures that overall demand conditions promote a timely recovery, and underpins medium-term growth prospects through growth-enhancing public investment and reforms,” Lane said at the virtual Ambrosetti Forum. “The macroeconomic role for fiscal policy is especially predominant under current conditions.”