Isabel Schnabel: Unequal scars - distributional consequences of the pandemic

Speech by Ms Isabel Schnabel, Member of the Executive Board of the European Central Bank, at the panel discussion "Sharing the burden of the pandemic", Deutscher Juristentag 2020, 18 September 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
21 September 2020

The coronavirus (COVD-19) pandemic is the most severe crisis in post-war history.[1] It threatens the health of the population, poses enormous challenges to the healthcare system and is causing significant economic costs. Within a short period of time, wide-ranging government support measures were introduced in an attempt to cushion some of the direct consequences of the crisis. In light of the enormous economic costs of the pandemic and the measures taken thus far, questions have been raised about how the economic burden of the crisis will be financed and distributed.

The pandemic is a global shock that has hit all euro area countries almost simultaneously. Since then, however, it has become increasingly clear that the pandemic is having very different impacts on different countries. Those countries that already exhibited low growth and limited fiscal space before the crisis have been affected most severely. As a consequence, the pandemic threatens to exacerbate existing crosscountry differences.

However, differences are not only emerging between countries. Within countries, too, there are strong indications that pre-existing inequalities are being reinforced by the crisis. Lower-income individuals, those with lower levels of education as well as women and young people are affected the most.