The European Central Bank could announce Thursday hundreds of billions of euros in new bond-buying to keep fighting the pandemic crisis, analysts predict, as EU governments prepare to wrangle for months over a joint response.
While some policymakers have urged abandoning the ECB’s self-imposed limits on buying government debt to stoke growth and inflation, the meeting is also the first since a ruling by Germany’s Constitutional Court urging restraint of the central bank’s powers.
“At a minimum, we think (governors) will add a further 500 billion euros” ($557 billion) to the 750-billion-euro Pandemic Emergency Purchase Programme (PEPP) decided in March, Capital Economics analyst Andrew Kenningham said.
If the ECB keeps up its present pace of buying government and corporate debt, “the total envelope will be exhausted by early October”, he added.
“The only questions are exactly what changes are announced and when.” ♦
