Europe’s response to the coronavirus (COVID-19) shock In the light of the economic fallout from the resurgence of the pandemic, it is absolutely crucial for monetary and fiscal policies to continue complementing each other in supporting the euro area economy. Europe’s policy response to the pandemic has been swift, decisive and unprecedented, both at the national and EU levels.
As regards fiscal policies, an ambitious and coordinated fiscal stance remains crucial, as a premature withdrawal of fiscal support would risk delaying the recovery and amplifying the longer-term scarring effects. National fiscal policies should thus continue to provide critical and timely support to firms and households most exposed to the pandemic and the associated containment measures.