Pandemic Emergency Purchase Program

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The Pandemic Emergency Purchase Program ( PEPP ; pandemic emergency purchase program ) is a monetary policy measure of the European Central Bank that is intended to ensure price stability and the effectiveness of monetary policy in the euro zone during the COVID-19 pandemic .

development and implementation

At the end of March 2020, the Governing Council decided on the time-limited purchase program for bonds from public and private borrowers, with a volume of 750 billion euros and a period for purchases until the end of 2020. The PEPP is to reduce the number of papers that are under the Requirements of the current CSPP qualified for purchase, expand. One of the objectives is to stabilize the inflation rate in the euro area at below 2%.

National central banks and the ECB carry out the purchases together. The distribution of possible losses is identical to the distribution that was agreed for the APP measure. The inventory of the PEPP is to be updated weekly on the ECB website.

The purchases began on March 26, 2020. In March, securities for 15.444 billion euros were purchased, in April 103.366 billion euros were added. In mid-May 2020, the program showed a total of 181.786 billion euros in purchased bonds.

Following a decision by the Governing Council of June 3, 2020, the expansion of the program by EUR 600 billion was announced on June 4, 2020. Up to this point in time, the ECB had almost exclusively bought government bonds with PEPP. The term was extended from the end of 2020 to the end of June 2021.

criticism

Despite the rapid pace with which the ECB spent the money from the program, it initially failed to make Italian government bonds more lucrative for investors. An analyst from Pimco speculated in the FAZ in mid-May 2020 that the ECB would have used up the 750 billion from the PEPP by October if it maintained the high rate of bond purchases.

Thorsten Polleit from Degussa Sonne / Mond Goldhandel pointed out on the occasion of the expansion of the purchase program from the beginning of June 2020 that PEPP now corresponds to an amount that makes up around ten percent of the money supply M3 of the euro, plus the bond purchases via the other ECB programs. According to Polleit, the ECB is financing the euro countries' new debt with the electronic banknote press.

See also

Web links

References and comments

  1. ^ A b Thomas Hanke: "ECB President Lagarde praises Corona aid and demands loyalty to the Bundesbank" , Handelsblatt dated May 18, 2020.
  2. ↑ a b Press release: "ECB announces € 750 billion Pandemic Emergency Purchase Program (PEPP)" , ecb.europa.eu of March 18, 2020.
  3. ↑ a b c “Pandemic Emergency Purchase Program (PEPP)” , Deutsche Bundesbank, March 2020.
  4. ↑ Europa Press: "El BCE rebaja un 15.3% su ritmo de compras contra el covid-19" , eldinero.com.do of May 18, 2020.
  5. ↑ "ECB expands emergency purchase program by 600 billion euros" tagesspiegel.de of June 4, 2020
  6. ↑ Steve Goldstein: "Here's what the ECB has been buying with the special pandemic asset-purchase program that it is set to expand" marketwatch.com of June 4, 2020
  7. ↑ René Höltschi: "The ECB keeps its feet still - and appeals to the heads of state and government" NZZ of July 16, 2020
  8. ↑ "Record bond purchases by the ECB" , faz.net of May 12, 2020.
  9. ↑ "The ECB is reloading tremendously and is following in the" footsteps of the Reichsbank "" welt.de from June 4, 2020