ECB: "With contagions, you risk a longer crisis"

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  The Mef's reply: "unfounded" observations

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January 14, 2021 ECB board members noted in their December meeting that the economic growth curve "now looks very different from a previously imagined av, oau shape" and that it is possible that "the second wave of the pandemic , rather than deepen the crisis, you extend it more than expected ".

It was read in the minutes of the meeting, in which the governors shared the impression that "a prolonged reduction in activity could inflict more lasting damage on numerous economic sectors, increasing the risks of an increase in insolvencies and unemployment": the impact on medium-term growth prospects it would inflict "more lasting wounds".

At the last meeting of the Governing Council on 9-10 December, the governors of the European Central Bank agreed to emphasize the importance of making

, the purchase program for the pandemic emergency.

This is what we read in the minutes of that meeting, published today, which read how at the same time it was considered "essential to indicate that the Council was ready to

Pepp

if necessary".

With regard to the flexibility inherent in Pepp "it was emphasized that the focus on maintaining favorable financing conditions implied a move away from a constant monthly purchasing pace in favor of a rhythm of purchases in line with market conditions, in order to prevent a tightening financing conditions contrary to the objective of offsetting the negative impact of the pandemic on the expected path of inflation. This approach, together with well-targeted communication, would allow the Governing Council to reduce the pace of purchases while having the same effect on financing conditions ".

"This - conclude the minutes - could translate into greater effectiveness and the use of a lower amount than the entire budget over the life of the program. The flexibility in allocating Pepp purchases over time has been considered as well aligned with the principle of proportionality and with the monetary policy position of the Governing Council ".

At the same time, the governors reaffirmed their full commitment to a possible new increase in the Pepp budget if necessary.

The European stock exchanges reacted in a mixed and rather nervous way after the minutes of the ECB which show the fear of a longer crisis with infections.