IMF Europe Economy Coronavirus




30 Mar 2020


Washington, DC, United States



IMF Europe Economy Coronavirus
Washington, DC – Recent
1. B-ROLL: Exterior IMF

Washington, DC ---30 March, 2020
2. SOUNDBITE: (English) Poul Thomsen, Director European Department

“The recession is going to be bad. We don't know how bad, but it will be bad. Look, the strategy here is to deliberately shut down big segments of the economy as a way of coming to grips with this crisis. These shutdowns are not accidents, it's a deliberate act. And we are shutting down non-essential sectors that account for one-third of GDP. That means every month that this shutdown continues, there will be at least a loss of 3 percent of GDP just in those sectors. Then there are the wider implications on the wider economy.”

3. B-ROLL: Exterior IMF
4. SOUNDBITE: (English) Poul Thomsen, Director European Department

“I think the policy reactions of European policymakers are very strong. As far as the financial sector and monetary policy is concerned, we have huge asset purchases. This is very welcome. And the regulators are allowing banks to use the buffers, so-called countercyclical buffers, that they built up during the good years. If there ever was a time to use that, this obviously now.”

5. B-ROLL: Exterior IMF
6. SOUNDBITE: (English) Poul Thomsen, Director European Department

“We know from past crises: The problem is that if somebody loses its job for a long time, they lose skills and have difficulty coming back into the labor market. We know if non-performing loans are allowed to build up on a large scale, it impairs households and banks and financial institutions' balance sheets and that will be a drag on the recovery also. So, putting all this money into the system, and reduce the risk of non-performing loans, reduce the risk of layoffs, is really going to help the recovery gain speed once the medical crisis is under control.”

7. B-ROLL: Exterior IMF
8. SOUNDBITE: (English) Poul Thomsen, Director European Department

“Debt levels are not a concern here. We need to be sure that we inject sufficient money to contain the crisis. All European countries have the fiscal space to react powerfully. “

9. B-ROLL: Exterior IMF
10. SOUNDBITE: (English) Poul Thomsen, Director European Department

“The part of Europe that we should focus on first and foremost are the smaller economies in Central and Eastern Europe outside the EU. They don't have the deep financial markets and the linkages to the EU that are important for the policy space, for their ability to react forcefully. And actually, more than half of these countries have already approached us for emergency assistance. So, we are an important vehicle for ensuring that these countries have the necessary fiscal space so that they can also react in an appropriate way to the crisis.”

Washington, DC – Recent
11. B-ROLL: Exterior IMF
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  • Brian Walker
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