Draghi: “Devastating Covid, unprecedented contraction of GDP”

“The Covid pandemic has hit our lives and our societies in a devastating way. At least 3.8 million people have lost their lives – a fifth of them in Europe. Italy and Spain are among the most affected countries with an overall total of over 200,000 deaths. The uncertainty created by the pandemic, together with the measures taken to contain it, have had a heavy impact on the economy “. Thus Prime Minister Mario Draghi, in Barcelona, ​​where he was awarded the ‘Cercle d’Economia’ prize for European construction. “The gross domestic product of the European Union fell by 6.1% – the largest contraction ever recorded. The strongest reduction was recorded in Italy and Spain, where GDP fell by 8.9% and 10.8%. The development of some effective vaccines – the Prime Minister remarked – has traced a well-defined path to get out of this crisis. Ambitious vaccination campaigns have been launched across the EU, which are managing to save lives and to reduce the pressure on hospitals “.” The speed of this recovery is also the credit of policy makers around the world. Throughout the duration of the crisis, governments and central banks have implemented resolute fiscal and monetary policy measures to support the economy Draghi underlined – The banking system regulators have granted moratoriums on loans, as well as suspending some of their prudential rules in order to prevent the risk of a credit crunch “. “This timely adjustment of policies – he continued – has not only made it possible to avoid an even deeper recession and to safeguard millions of jobs, but has also mitigated the risk of hysteresis, as well as creating the conditions for a rapid economic recovery. To date “nearly one in two Europeans has received at least one dose of the vaccine, and one in four is fully vaccinated. In the last week, 140,000 new cases have been registered in the EU compared to more than 1 million just two months ago. Vaccination efforts have also allowed us to reopen our economies. There is a return to growth “, said the premier. But Prime Minister Draghi looks to the recovery with optimism, Prime Minister Mario Draghi:” According to the forecasts of the European Commission, this year the gross domestic product of the EU will grow by 4 ,2%. In Italy and Spain, an increase of 4.2% and 5.9% respectively is expected. These forecasts could be revised upwards, with the return of confidence between businesses and families “, he remarked.” Although the pandemic situation seems increasingly under control, we are still far from the end “, however, reminded Draghi.” vaccination efforts until now have been concentrated in the rich world – the Prime Minister later remarked – Only 0.3% of the total doses have been administered in low-income countries, while the richer countries have distributed 85% of the total. This difference is not only ethically unjust, it is also very dangerous “.” As long as the virus continues to circulate freely – he warned – there will always be a risk of new variants. One or more of them could be resistant to our vaccines, compromising the success of our campaigns. “For this,” we must continue to invest in research, as well as accelerate the commitment to ensure widespread access to vaccines. Supporting our scientists will also put us in a much better position should we face another pandemic. “” The continued uncertainty means that the reasons for maintaining an expansionary monetary and fiscal policy remain compelling. Our minimum goal must be to bring economic activity back at least in line with the pre-pandemic trajectory. Only then can we say that we have overcome the effects of the health crisis on our societies and on employment. However, according to current forecasts, it will not be possible to achieve this without further efforts. We must therefore act quickly and effectively “, said the former president of the ECB.” During the pandemic, we used important tools to protect the productive capacity of our economies – he continued – The fiscal expansion has been more focused on maintaining business life and safeguard the work. We have protected the supply side of our economies and now we need to make the demand rise to reach those supply levels. The ideal goal would be to overcome the pre-pandemic growth trajectory. With higher levels of activity than before, we will be able to offset the increase in debt that occurred during the health crisis. Employment needs to increase faster to create the jobs we need. The global economy is undergoing a phase of profound changes, including the ecological and digital transition, which will require a reallocation of the workforce. It is essential to maintain favorable conditions of demand in order to guarantee support for workers, who are facing an increasing risk of displacement “, the words of the Prime Minister.