The European Central Bank's emergency program to deal with the coronavirus pandemic (PEPP), via massive debt buyouts, "could be extended" beyond the end of 2020, the President of the European Union announced on Thursday institution, Christine Lagarde.
The 750 billion euro scheme, launched in March to cushion the economic shock triggered by the coronavirus pandemic, "will be continued until (the ECB) considers that the coronavirus crisis has passed, and in any case until the end of the year, ”said Christine Lagarde during a virtual press conference. "PEPP is the best tool we have" to counter the economic shock of the coronavirus, she added.
Extraordinary times require extraordinary action. There are no limits to our commitment to the euro. We are determined to use the full potential of our tools, within our mandate. https://t.co/RhxuVYPeVR
- Christine Lagarde (@Lagarde) March 18, 2020"A firepower of more than 1,000 billion euros"
In this context, the ECB is ready to review the “composition” of the PEPP - that is to say the distribution of the repurchases of public or private debt purchased by the ECB - and its “size”, and this “as much as necessary "And" as long as it takes, "says the monetary policy decision release. If the PEPP responds to flexible purchasing rules, the issue was not discussed on Thursday to integrate bonds that have become "rotten" due to their degradation by financial rating agencies, said Christine Lagarde. However, this exception already applies to securities issued by Greece.
The emergency program is however only one part of the anti-crisis tools of the ECB which has "a firepower of more than 1.000 billion euros", put forward its president. At the meeting of the board of governors on Thursday, the ECB essentially maintained its anti-crisis arsenal, with the exception of its giant loans to banks made even more favorable.
The monetary institute will notably spend an additional 120 billion euros by December on quantitative easing or "QE", its program to support the economy launched in March 2015.
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