Lagarde pressure over ECB support for Italy

Lack of EU fiscal action weighs on central bank meeting

 
Christine Lagarde will face pressure on 30 April to expand European Central Bank action to support Italian bonds in the absence of new European Union fiscal measures to aid pandemic-hit euro members.

At the centre of a psychological battle with financial markets and politicians, the ECB has won breathing space for Italy with its 18 March pandemic emergency purchase programme allied with last week’s downgrading of investment standards for securities purchases. After a month of heavy buying, likely to have been skewed towards weaker countries’ bonds, the ECB president is expected to reiterate that the ECB will, if necessary, expand the PEPP beyond the announced end-year total of €750bn. At the latest daily purchase rate of €5.4bn, the ECB could exhaust the PEPP’s volume by October. This has raised speculation that the ECB’s governing council, meeting by video conference on 30 April, could approve a further €250-500bn.

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Πηγή: omfif.org