The Corona-crisis hits the economy in the Euro area with full force. The ECB expects a severe recession. The guardian of the currency, torches not long, and still strong.

Frankfurt/Main (dpa) - In the fight against the unprecedented economic consequences of the Corona pandemic in Europe, monetary authorities have doubled their use of almost.

The European Central Bank (ECB) is expanding its Corona-notkauf program for bonds to 600 billion euros to 1.35 trillion euros. The governing Council of the ECB decided on Thursday in Frankfurt. The minimum duration of the purchase programme will be extended in addition to half a year until the end of June 2021. The Central Bank expects this year with a severe recession in the Euro zone with a slump of the gross domestic product (GDP) of 8.7 percent and an Inflation close to zero.

ECB-President Christine Lagarde spoke of an unprecedented economic downturn. Unemployment, income losses and an exceptionally high level of uncertainty about further economic development had led to a significant decline in consumer spending and investment. A recovery is expected in the third quarter.

In the coming year is expected to grow the economy in the common currency area of the 19 States, according to the latest forecasts, the Central Bank sharply to 5.2 per cent. In the year 2022, the ECB expects 3.3 percent growth. However, the development especially of the duration and the success of the measures to curb the pandemic from suspension, said Lagarde.

The value of paper purchases to help States, such as companies: they do not have to provide for your papers as high interest rates, when a Central Bank acts as a large buyer in the market. In the crisis, countries have launched rescue packages worth billions, the burden on the households. First, the ECB had estimated until at least the end of the year to 750 billion euros for the purchase of government and corporate bonds in the framework of the Corona-emergency programme PEP (Pandemic Emergency Purchase programs).

"In the light of a massive economic collapse, rising unemployment rates and a low inflation rate had to repair the ECB," said Thomas Gitzel, chief economist of VP Bank. The expansion of asset purchases is of benefit primarily to the debt-ridden countries in the Eurozone. For countries such as Italy or Greece, the purchases of the ECB were "pure balm".

According to the assessment of the savings banks Association DSGV the state economy are complementary measures, such as the one just adopted by the Federal government billion package and monetary policy is currently: "Everyone is working hard on his construction site."

In interest rates by the ECB, however, has relatively little room for manoeuvre. Because of the interest rate in the Euro area is now for a good four years to a record low of zero percent and at this level he will be after the decision of the governing Council Thursday. Banks will have to pay also continues to be 0.5 percent penalty interest rate if they Park money at the Central Bank. This should help boost lending.

the main objective of the ECB is a well-balanced price level in the case of a medium-term inflation rate of just below 2.0 percent. Inflation is, however, for years this is the target value. The Trend has exacerbated in the Corona-crisis by the slump in energy prices due to a worldwide fall in demand.

In may, the consumer prices in the Euro area, only 0.1 percent higher than a year earlier. This year, inflation should reach according to the assessment of the Central Bank of just 0.3 percent. For the year 2021, the monetary authorities expect an annual price increase of 0.8 per cent, and for 2022, with 1.3 percent.

Stagnate, prices or fall even on a broad Front, can convince the consumers and businesses, investment delay. Because it could soon be even cheaper. This Wait can stifle the economy. Europe's policymakers have been in crisis mode. Ongoing buying programs of the Central Bank for bonds reached 2.8 trillion already that's a huge volume.

The Federal constitutional court had recently ruled that the decisions of the ECB on its bond-buying program PSPP (Public Sector Purchase programs) are competence-of-bounds. The Central Bank now needs to demonstrate the proportionality of this with interruption since March 2015, the current program - otherwise, the Bundesbank is not allowed to participate in these purchases. The Corona-aid from the ECB clung to the German Supreme court in its judgment, however, expressly.

With its controversial decision to Karlsruhe was the first time against a judgment of the European court of justice (ECJ). Lagarde reiterated the independence of the Central Bank: "We are confident that a good solution will be found - a solution that represents in any way the independence of the ECB and the primacy of the European Law in question."

ECB-interest rate decision 4.6.2020

input statement, ECB President Lagarde ECB-Pk 30.4.2020

ECB-message-to-bond purchase program in the Corona-crisis

time series key ECB interest rates

ECB-buying programs

the Legal framework of the ECB

constitutional Court ruling of 5. May 2020

notice from the court to the judgment

ECJ judgment of 11. December 2018

information about the EU to the ECJ

government purchase program over the role of the ECJ,

the EU Commission's infringement procedure

ECB's new Bonds in the Corona-crisis

Interview Lane 12.5.2020

Interview Lane 18.5.2020

Interview Lagarde 18./19.5.2020

Interview de Guindos 26.5.2020

Interview Beak 27.5.2020

Dialog Lagarde with young people 27.5.2020

input statement, Lagarde 4.6. 2020