LISBON (Reuters) – It is still too early for the European Central Bank to discuss policy after the end of its 1.85 trillion euro emergency bond purchase scheme, ECB President Christine Lagarde said on Friday, dismissing calls by some colleagues to consider tapering.
ECB policymakers are going to discuss whether to maintain, slow down or speed up the pace of their Pandemic Emergency Purchase Programme (PEPP) at the June 10 meeting in light of a better growth outlook and rising bond yields. [GVD/EUR]
“We are committed to preserving favourable financing conditions, using the PEPP envelope and to do so until at least March 2022,” Lagarde told a news conference.
“It’s far too early and it’s actually unnecessary to debate longer term issues,” Lagarde added.
With the euro zone economy rebounding on the back of a surge in vaccinations, some policymakers are making the case for the ECB to start giving up its emergency measures and revert to more traditional forms of stimulus.
But others are more cautious, warning that the fledgling recovery is predicated on copious ECB support and a recent rise in borrowing costs to two-year highs is already major drag.
(Reporting by Michael Nienaber; Writing by Balazs Koranyi and Francesco Canepa; Editing by Catherine Evans)
