Jan Phillip Fritsche, Anna Gibert, Chi Hyun Kim
(Monetary Dialogue Papers ; March 2021)
The European Union has put in place an extraordinary array of policy measures to mitigate the devastating economic consequences of the COVID-19 pandemic. The sheer amount and extent of the support economic lifelines makes a rushed termination of policies potentially subject to dire cliff effects. Avoiding these cliff effects requires a combination of decisive and long-lasting fiscal stimuli with an accommodating monetary stance, as well as a renewed European strategy that presents a unified fiscal policy, growth-enhancing investments, and a green modernisation of the economy.This paper was provided by the Policy Department for Economic, Scientific and Quality of Life Policies at the request of the committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 18 March 2021.