“EU economy experiencing a dramatic fall", says ECB head Lagarde

Christine Lagarde, head of the European Central Bank, told European Union leaders on Friday that “The EU economy is experiencing a dramatic fall,” and called on the bloc to act to spearhead revival, diplomatic sources and officials said.

Lagarde spoke with EU leaders via video conference to address the issue of how to engineer a recovery from the crisis.

She said the eurozone economy was headed for a “sharp decline” of some 13% in the second quarter and reiterated the bank’s forecasts for a GDP drop of 8.7% in 2020 and a rebound of 5.2% in 2021.

She said the full effects of the EU’s worst economic downturn have not yet manifested themselves fully on the labour market and that the euro zone’s unemployment rate could reach 10%.

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