FRANKFURT, May 7 (Reuters) - The euro zone economy is facing a deep recession amid the coronavirus pandemic and greater cooperation is needed in fiscal policy to support the recovery, European Central Bank Vice President Luis de Guindos said on Thursday.
“It is thus vital that the fiscal response to this crisis is sufficiently forceful, in all parts of the euro area,” de Guindos told the European Parliament’s committee on economic and monetary affairs. There now needs to be a political agreement to build the appropriate instruments for this common response.
De Guindos said the euro zone economy could shrink by up to 12% this year so the ECB stood ready to do even more, a stance that is consistent with the ECB’s earlier position. (Reporting by Balazs Koranyi Editing by Gareth Jones)