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Even more money to secure the eurozone economy. The European Central Bank Council on Thursday extended the Pandemic Emergency Asset Purchase Program (PEPP) by 500 billion euros. In total, the PEPP now has 1.85 billion euros, in an attempt to support member states in the face of the second wave of COVID-19 infections. In addition, the program was extended until at least March 2022.
The institution led by Christine Lagarde also decided that the reinvestment phase of the PEPP will continue, at least, until the end of 2023, that is, its intervention in the market to lower the financing costs of the States will continue during the phase that is expected to be already in the distribution and application of vaccines against covid-19.
Markets already anticipated increased support from the ECB, taking into account the deterioration in economic activity at the end of this year, due to the pandemic. Also as expected, benchmark interest rates were unchanged at zero and below zero.
As for the new conditions, which are more favorable, they should be in place by June 2022. In the same vein, three additional operations will be carried out between June and December 2021. The total amount that banks can withdraw under these Operations was also increased, from 50% to 55% of its stock of eligible loans.
Relief measures with regard to guarantees, adopted in April this year, will also continue for a longer time, now until June 2022. “The extension of these measures will continue to ensure that banks can take full advantage of the operations Liquidity ratio of the Eurosystem , in particular recalibrated TLTROs “, justifies the ECB.
The Governing Council also decided to make available four more long-term refinancing operations under the pandemic in 2021.
Net purchases under the Ordinary Asset Purchase Program (APP) will continue to be made at a rate of 20,000 million euros per month, keeping the perspective that these purchases will last as long as necessary and shortly before. interest rates start to rise.
Christine Lagarde will explain the decisions taken at a press conference scheduled for 1:30 p.m. this Thursday.
(News updated at 13:23)
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