The ECB does not rule out activating Draghi’s unlimited public debt purchases

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Black Monday presses the ECB to lower rates more





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The European central bank (ECB) would be open to reactivate the program of unlimited purchases of public debt (OMT) if necessary to tackle the crisis generated by the Covid-19 coronavirus, as reported by the agency on Wednesday Bloomberg.

The program was announced in 2012 by the then president of the issuing institute Mario Draghi, although it was never used. Three years later, it was endorsed by European Justice after German judges questioned its legality when it comes to banning monetary financing from EU member states.

Anonymous sources cited by Bloomberg ensure that the implementation of the program was Mentioned in a timely manner during the extraordinary meeting held last week and that concluded with the announcement of a purchase program for assets for 750,000 million euros.

Catch up with the Fed

The activation of the OMT would suppose put the ECB’s response on par with that of the United States Federal Reserve (Fed), which this week assured that it would buy assets unlimitedly for as long as it deemed appropriate to tackle the consequences of the coronavirus.

This Tuesday the Dow Jones Industrials Index rebounded by 11.4%, which is the biggest increase in a single day since 1933, after the announcement of the Fed and in view of the prospect of agreement between the Republican and Democratic parties in the United States on a stimulus plan of two trillion dollars (1.84 trillion euros).

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