European Central Bank (ECB) will pour even more money into the eurozone economy, writes CNBC … The regulator announced the expansion and extension of the quantitative easing program (officially – the emergency asset purchase program in connection with the pandemic, PEPP).
Now the volume of the program will amount to 1.85 trillion euros – another 500 billion will be added to the previous 1.35 trillion. In addition, it will be extended by nine months, until March 2022.
The funds will be issued for the redemption of government and corporate bonds from commercial banks. The banking system will receive additional liquidity for lending to the economy, credit institutions will reduce the need for borrowed money, which will lead to a decrease in rates on the interbank market. In addition, the prices of purchased bonds will rise, their yields will decline, which will serve as a guide for other rates on the market.
The ECB also kept the main rates: the key rate at zero percent, the deposit rate (at which banks are required to keep temporarily free funds with the regulator) – at minus 0.5 percent.
On December 9, it became known that Poland and Hungary agreed with the presiding in European Union Germany and agreed on the adoption of a seven-year budget for 2021-27 in the amount of 2.2 trillion euros, including a plan to rescue the European economy for 750 billion, which will be funded by issuing bonds on behalf of European Commission .