States will have to print money to deal with public-sector debt in the aftermath of the coronavirus Covid-19, says Ana Botín, Santander’s group executive chairman.
As Santander announced an 82% dip in profit in the first quarter due to coronavirus, she tells Euromoney that financial leaders, including in Europe, “have to throw away the rule book” to support their economies.
“We’ve never seen this kind of crisis in our lives. We cannot play by the rules. We have to realise that this is a different kind of crisis. If you don’t react quickly, a huge number of companies are going to disappear. And if we do not act now to protect viable businesses then the recovery will take much longer.”
So-called monetary financing is “the only way out in a democracy”, according to Botín, as stringent spending cuts and tax increases are no longer an option.
“You have to inflate your way out,” she says. “In Europe, as we cannot adjust through the currency, so the alternative requires big adjustments to household incomes.
