Pablo Hernández de Cos: The European response to the COVID--19 crisis

Opening address by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chairman of the Basel Committee on Banking Supervision, at the Fundación Internacional Olof Palme Conference, 13 November 2020.

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

Why joint European action was/is necessary As in the rest of the world, the COVID-19 outbreak has triggered in the euro area a health and economic crisis that is unprecedented in recent history. Against this backdrop, the economic policy response has had to be very forceful to mitigate the short-term economic effects and to prevent those effects from becoming persistent and affecting growth in the medium and long-term. 

The fact that this crisis is global also means that a coordinated response among the different countries is more effective both in combating the pandemic and as regards the capacity to facilitate economic recovery for all. The need for a coordinated response is particularly evident for European Union (EU) Member States, given the very high level of economic and financial interconnectedness. This is especially true in the euro area, because it shares a common currency, which increases both the economic benefits of joint action and the negative consequences of possible inaction.