(Bloomberg) -- European Central Bank President Christine Lagarde said governments must make sure to roll out their historic joint spending plan on time to ensure the region’s recovery from the coronavirus pandemic.
The European Union’s 750 billion-euro ($896 billion) recovery fund “should become operational without delay,” Lagarde told lawmakers in the European Parliament. “By brightening economic prospects for firms and households, fiscal policy would also strengthen the transmission of our monetary policy measures.”
The president also urged the EU’s member states to finalize their spending plans in the coming weeks. National governments are currently in talks with the European Commission on how to spend the money from the joint fund, and some submissions have been judged inadequate so far. Plans are due by the end of next month with funds to be disbursed in the summer.
The euro-zone economy is already lagging behind the U.S. because of its slow vaccine rollout, now complicated even more by the suspension of AstraZeneca (NASDAQ:AZN) Plc’s shot in several member states.
The ECB is stepping up the pace of its 1.85 trillion-euro pandemic bond-buying program for the next three months to prevent higher yields further undermining this year’s recovery. Borrowing costs have increased globally in part because of spillovers from the strong U.S. rebound and President Joe Biden’s $1.9 trillion stimulus bill.
Lagarde’s comments come after Slovakia’s member of the ECB’s Governing Council, Peter Kazimir, voiced concern that the EU is rolling out its fiscal stimulus too slowly in comparison with the U.S.
Executive Board member Isabel Schnabel also warned this week that “we cannot afford a delay” in disbursing EU funds.
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