LAGARDE: Debt cancellation for eurozone members unthinkable

European Central Bank (ECB) chief Christine Lagarde on Sunday rejected calls to cancel debts run up by eurozone members to buttress their economies during the Covid-19 crisis.

The ECB has taken unprecedented steps to cushion the economic blow from the pandemic in the 19-nation euro area, launching a massive bond-buying scheme that has so far totaled EUR 1.85 trillion euros, writes The Guardian.

– Cancelling that debt is unthinkable – Lagarde told France’s Le Journal du Dimanche weekly, in comments reported by AFP.

– It would be a violation of the European treaty which strictly forbids monetary financing of states – she said, calling it one of the “founding pillars” of the euro single currency.

Lagarde was reacting to a call Friday by more than 100 economists for the ECB to further boost the economic recovery of eurozone members by forgiving their debts, The Guardian adds.

Lagarde, a former French finance minister, admitted that “all eurozone countries will emerge from this crisis with high levels of debt.”

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