Free Trial

MNI BRIEF:Time To Debate End To PEPP Reinvestment-ECB's Wunsch

(MNI) London

There are no good reasons for the European Central Bank's Governing Council to delay a discussion over ending reinvestments under its Pandemic Emergency Purchase Programme, Belgian National Bank head Pierre Wunsch said in an interview published on Thursday.

"I see absolutely no reason to continue PEPP reinvestments - apart from the fact that we promised to do so," Wunsch told Boersen Zeitung. "We have ended reinvesting in APP and I see no reason to continue PEPP reinvestments". Earlier on Thursday, accounts of the ECB's October meeting noted that the Governing Council decided such discussions would be "premature" at that meeting.

According to Wunsch, the argument that PEPP reinvestments were a first line of defence against disrupted transmission mechanisms was problematic. "Based on this argument, it means that we are not just flirting with fiscal dominance. We are then in fiscal dominance," he said. "There are some countries in the euro area that have excessive debts and deficits. That doesn't mean that they are on the brink of bankruptcy. But it does mean that they have to reduce these deficits and do so as quickly as possible," he added.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
True
MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
True

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.