The Pandemic Emergency Purchase Program - engaging TPI to help France

The Pandemic Emergency Purchase Program was introduced in March 2020, eventually accumulating $1.78 trillion of euro zone government bonds

At the June 6 ECB quarterly review, the Governing Council confirmed PEPP reinvestments would be reduced by €7.5 billion a month starting in July 

Judicious application of the PEPP program could prevent having to reach for a bigger bazooka in the future, such as the Transmission Protection Instrument introduced in 2022 as a mechanism for calming unwelcome bond-market moves, but which demands nigh-on impossible conditions before it can be implemented.

Realistically, engaging TPI to help France through a politically driven bond-market crisis would fundamentally split the Governing Council in the absence of any existential threat to the euro project. 

Frugal countries, such as Germany, would object vigorously.

The ECB should seriously reconsider scaling back PEPP redemptions, which offer its best defense against a bond-market blowout ruining the summer.

The central bank should reconsider plans to shrink its balance sheet given the risk of turbulent debt markets.

Marcus Ashworth Bloomberg 4 July 2024

Ytterhögerpartiet Nationell samling (RN) och dess allierade ser inte ut att kunna vinna absolut majoritet i det franska parlamentsvalet

För att bättra på chanserna att vinna över Nationell samlings kandidater har vänster- och RE-kandidater som kom trea i den första valomgången hoppat av, i en slags pakt.

Taktiken går ut på att väljare som inte vill se Le Pens kandidater vinna ska kunna rösta på en ”gemensam” motkandidat.

SvD/TT 4 juli 2024



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