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

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.