That is why the Eurosystem responded quickly in spring with a whole bunch of measures. This contribution to stabilisation in the crisis was and is important. However, ﬁscal policy has taken the lead. And quite rightly so. It has both the democratic legitimacy for heavy interventions and the custom-ﬁt instruments. Lockdowns and voluntary social distancing led to massive revenue shortfalls in some industries.
These shortfalls can disrupt the overall ﬂow of payments in the economy and severely constrain the spending of many households and ﬁrms. Fiscal policy, unlike monetary policy, can address this problem in a targeted manner by substituting lost income with transfers. [4] Now, the pandemic has forcefully resurged and stricter containment measures are back in force in many places, including Germany.