(Bloomberg) -- Klaus Regling, the managing director of the European Stability Mechanism, said the European Union economy doesn't need more fiscal stimulus and the bloc's recovery fund is on track to make its first disbursements on time this summer.
Regling said policy makers at the International Monetary Fund's spring meeting this month had praised EU efforts to support the economy and he highlighted that the loan-guarantee programs used widely in Europe has supported bank lending equivalent to 17% of Gross Domestic Product.
The EU recovery fund “is on time,” Regling said in a Bloomberg Television interview. “There was never an expectation that money would flow before mid-2021.”
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He said that it would have been better to deliver the aid more quickly, but that wasn't possible because the program needed to be ratified by EU member states. He said the EU program is focused on strengthening the supply side of the economy -- unlike the U.S. efforts to boost demand -- and that will provide more benefits in the long term.
He said the German Constitutional Court's decision to consider objections to the program adds an element of uncertainty, but he pointed out that in the past the court has allowed EU aid packages to go ahead.
“I wouldn't be surprised if we see something similar,” he said. “That would still be in line with the timing that was envisaged” for the EU recovery fund.
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