ECB to Announce Another Stimulus Due to Covid-19

ECB to Announce Another Stimulus Due to Covid-19

European Central Bank is likely to release a new stimulus for the struggling eurozone economy in December. Since the second wave of coronavirus, Germany and France, Europe’s biggest economies, imposed new lockdowns. 

The Pandemic Emergency Purchase Programme

Experts believe that ECB’s planned meeting in December will involve the announcement of new bond purchases, including allowing cheaper loans for banks. It is expected that ECB will probably purchase an additional €500 billion of debt through the end of 2021.

The Pandemic Emergency Purchase Programme (PEPP), which was launched in the wake of the Covid-19 pandemic, is due to last at least until June 2021. Indications show that it will most likely be extended at the next ECB meeting.

The Second Wave Threatening the Economy

Many companies are still weakened by the first lockdowns back in spring. Getting back on their feet proved to be more challenging than it was initially thought.

Since the end of summer 2020, there has been a rise in the number of coronavirus cases, which prompted the moniker the second wave of Covid-19. A number of European countries announced lockdowns hoping it will cease the number of infections.

This also meant that people mostly stopped dining out. The little traveling that was occurring also came to a halt. Customers at the same time started avoiding shopping centers again and, therefore, their in-store purchases dropped. 

Next ECB Meeting in December

Christine Lagarde, ECB president, also indicated that the scheduled ECB meeting might be even sooner than firstly planned. It is left to see if the lockdown measures will prove effective and whether the adjusting of the PEPP will take place.

Christine Lagarde
Christine Lagarde, President of ECB, Ralph Orlowski/Reuters

ECB’s next meeting is scheduled for Thursday 10 December 2020. The council’s decisions will be announced via press release at 1.45 pm CET, followed by a press conference at 2.30 pm CET.

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