BERLIN (Reuters) - European Central Bank President Christine Lagarde told Europe’s heads of government that lockdowns being imposed to fight the coronavirus epidemic could easily cause the EU’s economy to shrink by 5%, the Frankfurter Allgemeine reported on Wednesday.
The newspaper cited high-ranking EU diplomats who had said that her estimates of the impact of the lockdown measures ranged between 2% and 10% of total growth.
The core calculation was based on the assumption that each month of lockdown would reduce growth by 2.1%, the newspaper cited the ECB as saying. The assumption that the economy would shrink 5% was based on a “realistic” assumption that lockdowns would last for three months, the bank told the newspaper.
Reporting by Thomas Escritt, editing by Scot W. Stevenson