The Governing Council of the European Central Bank (ECB) does not want the implementation of the Next Generation EU program to suffer any delays.
In the speech that marked the beginning of this Thursday's press conference that followed the announcement of the Governing Council's decision on monetary policy, ECB President Christine Lagarde stressed that the European stimulus program assumes “a key role” in economic recovery and that stressed “the importance of being operational without any delay”.
The ECB, the highest body for monetary policy in the eurozone, has thus launched a splinter at the European Parliament and the European Council that do not understand each other about the next budget of the European Union, which is part of the European support package, which could delay its implementation .
The Recovery Fund - or Next Generation EU - approved in July by the Council, with a global amount of € 750 billion between grants and loans, depends on the European budget. With the date scheduled for the beginning of the implementation of the Fund, on January 1, 2021, it is then urgent that Parliament and the Council reach an agreement on the MFF.
For the ECB, the Next Generation EU will contribute to a more uniform economic recovery and increase the economic resilience of Member States and, consequently, support the effectiveness of monetary policies.
Last week, it was the turn of the European budget commissioner, Johannes Hahn, to make a similar appeal, when he praised the importance of unblocking negotiations between the European Parliament and the European Council, which make it difficult to approve the European Union budget.
This Thursday, the Governing Council of the ECB, decided that it would not reinforce or extend the time horizon of the Pandemic Emergency Purchasing Program (PEPP), in line with most analysts, who anticipated further measures for the December meeting.
The ECB acknowledged in a statement that there are risks in the current situation and signaled that it will analyze the information “carefully”, which included “the dynamics of the pandemic, the projections for the distribution of a vaccine and the exchange rate developments” of the euro.
“The new projections for December will allow a reassessment of the economic outlook and the calibration of risks. Based on this reassessment, the Board of Governors will recalibrate its instruments, appropriately, to respond to changing circumstances and ensure that financing conditions remain favorable to support the economic recovery and offset the negative effects of the pandemic on projected developments inflation ”, the note reads.
For the third consecutive time, the ECB decided to leave everything as it is. The last time Frankfurt reloaded the PEPP, which started in March, happened in the wake of the June meeting, when it strengthened its asset buying power from 750 billion euros to 1,35 billion euros and extended it another six months, until June 2021.