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In this context, it is clear that both fiscal support and monetary policy support have to remain in place for as long as necessary and “cliff effects” must be avoided. Otherwise, we risk hysteresis in the labour market, an unnecessary loss of viable businesses and greater inequality. And the recovery in the euro area remains uncertain, uneven and incomplete, while the new coronavirus-related restrictions currently being introduced across Europe will add to uncertainty for firms and households.
Fiscal support and monetary policy in this context means unlimited monetary inflation. This would have been unthinkable even last year, even with the former ECB's president's promise that the bank will preserve the euro at all cost. The German government would just not allow it, we did have Community wide rules about the 3 percent of GDP deficit rule, remember that? Now this was partly due to the fact that Europe didn't really have to spend money, the Chinese government was doing it for us. As it stands now, I doubt the Maastricht criteria is coming back any time soon. Croatia was allowed to join the ECB II mechanism while breaking the Maastricht rules by a long shot, it's the pandemic after all, desperate times. The greater the need for a deficit and subsequent ECB and European Commission's interventions, the better. The governments and the EU institutions are free to spend as much as they want now - a communist take on Keynesian politics. Now, this kind of thing upsets the global monetary order (not necessarily to the EU's disadvantage), which is why in normal times, if the EU tried to pull something like this off, even if they were able to sidestep the UK, they would get a visit from top US officials explaining why the process would not be allowed to continue. The last time this happened was during the 2009-2014 eurozone crisis. As it stands now, the US is set to enter a protracted period of internal political strife, so there is no better time for the entire eurozone to go on the offensive.