The situation is getting from bad to worse in Europe as coronavirus spreads and countries shut down borders and their economy one after another. Everyone has panicked and even Boris Johnson and Macron who were trying to look confident earlier have now given up and are shutting down UK and France respectively.

The European Central Bank is also taking measures, but the monetary policy can only offer some relief at best, it can’t revive the economy if people remain isolated. ECB members Villeroy and De Cos made some comments earlier today.

Comments by ECB member Villeroy

• Determination of ECB to act was unanimous
• The new package will be effective
• There will be no liquidity problems
• Fall in long-term rates will help governments fighting the virus
• We have all the necessary flexibility

Comments by ECB member, Pablo Hernandez de Cos

• Asset purchase program to be completely flexible
• ECB to do ‘whatever it takes’ to respond to virus impact
• Calls for enhanced cooperation at the European level to mitigate virus impact
• Limits on asset purchases can be relaxed if needed
• Coronavirus pandemic is a transitory episode
• There is still no clear data to precisely assess the intensity of the virus impact