Andrea Garnero, an economist at the Organisation for Economic Co-operation and Development (OECD), retweeted an article on how the PEPP, which was launched a year ago to support euro area citizens in sustaining their households and stabilise financial markets during the Covid-19 pandemic, is being extended through 2021.
This was undertaken to keep the euro economy afloat amid the resurgence of Covid-19 infection cases, opines Christine Lagarde, the president of the ECB.
The ECB initiated PEPP with €750bn ($829.9bn) as a temporary measure to absorb the economic shock in response to the Covid-19 crisis when a major part of the economy and public life came to a standstill.
The bank purchased assets at a pace of more than €100bn ($110.6bn) per month under the asset purchase programme because private investors’ buying capacity deteriorated during the pandemic.
The assets were distributed across the euro area to benefit all the sectors across countries from their monetary policy response, the article noted.
Additional, far-reaching measures were taken to ensure that banks carry out their monetary policy, improving corporate funding situation and capital markets.
The PEPP was expanded twice in 2020, to a total of €1,850bn ($2,047.5bn), which was more than 15% of the GDP of the euro area before the pandemic.
Lagarde emphasises that the ECB has committed to continuing its assets purchase programme until March 2022, to keep financial conditions stable and support public sentiments during the crisis as vaccinations pick pace across the European countries.